Suppose a professor gives up her teaching job to devote her time to writing textbooks. If salaries of professors rise,
a. her accounting profit will rise.
b. her accounting profit will fall.
c. her explicit costs will rise.
d. her economic profit from textbooks will fall.
e. her economic profit from textbooks will rise.
D
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You value your economics textbook at $10. Someone else values it at $25, and that person is willing to pay you $20 for your textbook. Would selling your textbook to this person for $20 be Pareto efficient?
A. No, the person paid you $20 for the book so his net benefit was only $5, whereas your net benefit was $10. For this change to be Pareto efficient, each of you should have the same net benefit. B. Yes, because even though you gain from the trade and he loses, there is the potential for you to compensate him for his loss. C. No, because you did not receive the maximum amount the other person would have been willing to pay for the textbook. D. Yes, because both of you are better off as a result of the trade.
The demand schedule or curve confronted by the individual, purely competitive firm is:
A. relatively elastic, that is, the elasticity coefficient is greater than unity. B. perfectly elastic. C. relatively inelastic, that is, the elasticity coefficient is less than unity. D. perfectly inelastic.
Specialization and trade exploit differences in productivity across workers and
A. make everyone worse off. B. only benefit the importer. C. only benefit the exporter. D. make everyone better off.
Refer to the information provided in Figure 2.5 below to answer the question(s) that follow.
Figure 2.5Refer to Figure 2.5. The economy is currently at Point A. The opportunity cost of moving from Point A to Point B is the
A. 30 LCD televisions that must be forgone to produce 60 additional OLED televisions. B. 90 LCD televisions that must be forgone to produce 20 additional OLED televisions. C. 30 LCD televisions that must be forgone to produce 20 additional OLED televisions. D. 120 LCD televisions that must be forgone to produce 40 additional OLED televisions.