Use the following table to answer the question below. Jake's Production Possibilities ScheduleJane's Production Possibilities SchedulePounds of Green BeansPounds of CornPounds of Green BeansPounds of Corn01600801012020602080404030406020400800Without trade Jake consumes 20 pounds of green beans and 80 pounds of corn, and Jane consumes 40 pounds of green beans and 40 pounds of corn. If the terms of trade are 1 pound of green beans for 3 pounds of corn, and Jake sells Jane 72 pounds of corn, then the gains from trade for Jane are ________ pounds of green beans and ________ pounds of corn with trade and specialization.
A. 32, 16
B. 8, 4
C. 16, 32
D. 4, 8
Answer: C
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Thinking about the Coase theorem, the private solution yields __________ amount of efficiency and ___________ distribution of surplus as compared to a government solution.
A. the same; the same B. the same; a different C. a different; the same D. a different; a different
If you believe that the inflation rate is likely to be high over the next ten years, you would want to
a. have a pension with raises indexed to the CPI if you were going to be retiring b. obtain a variable rate mortgage c. not obtain any fixed rate consumer loans d. pay off all of your existing fixed rate loans e. be a shareholder of a bank because their profits are going to increase dramatically
The larger the portion of a person's total budget spent on a good, the more inelastic the demand for the good
Indicate whether the statement is true or false
A firm produces in a perfectly competitive market and hires labor in a perfectly competitive labor market. The firm hires four workers, the marginal product of the fourth worker is 4, and the wage rate is $40 . The firm produces 100 units of the product, which sell for a price of $10 . This firm is
a. maximizing profit when it hires four workers b. not maximizing profit and should hire more workers to increase profit c. not maximizing profit and should hire fewer workers to increase profit d. not maximizing profit when it produces 100 units of the product and should increase production to increase profit e. not maximizing profit when it produces 100 units of the product and should decrease production to increase profit