Smith and Jones comprise a two-person economy. Their hourly rates of production are shown below. CalculatorsPer HourComputersPer HourSmith10010Jones1206Suppose Smith and Jones begin by producing 100 calculators per hour; as Smith and Jones choose to efficiently produce fewer computers and more calculators, ________ should devote more time to calculators because his ________.
A. Smith; opportunity costs are lower
B. Jones; opportunity costs are lower
C. Smith; absolute advantage is larger
D. Jones; absolute advantage is smaller
Answer: B
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Deadweight loss is
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A. Wealth. B. Interest rates. C. Disposable income. D. Prices.
Products can be differentiated
A. if the buyers are homogeneous and their number increases. B. only by brand name. C. by location and by brand name. D. none of these.