Tom and Jerry have two tasks to do all day: make dishes and build fences. If Tom spends all day making dishes, he will have make 16 dishes. If he instead devotes his day to building fences, Tom will build 4 fences. If Jerry spends his day making dishes, he will make 14 dishes; if he spends the day building fences, he will build 7 fences. The opportunity cost of one fence is ________ for Tom and ________ for Jerry. Therefore Tom should specialize in ________.
A. 4 dishes; 2 dishes; dishes
B. 16 dishes; 14 dishes; fences
C. 16 dishes; 14 dishes; dishes
D. 4 dishes; 2 dishes; fences
Answer: A
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The table gives data for a nation. What is the amount of the country's GDP?
A) $6,000 billion B) $6,200 billion C) $6,900 billion D) $5,800 billion E) $6,600 billion
Policy actions designed to allow relatively open competition in national stock and bond markets are called
A) capital market liberalization. B) financial sector deregulation. C) cross-border mergers and acquisitions. D) regulatory arbitrage.
Given the dominant strategy of MiiTunes according to the figure, we can predict that The Rock Shop:
This figure displays the choices and payoffs (company profits) of two music shops-MiiTunes and The Rock Shop. MiiTunes is an established business in the area deciding whether to charge its usual high prices or to charge very low prices, in the hopes that a new business will not be able to make a profit at such low prices. The Rock Shop is trying to decide whether or not it should enter the market and compete with MiiTunes.
A. will enter and enjoy profits of $4 million.
B. will enter and lose $2 million.
C. will not enter and earn $0.
D. Their actions cannot be predicted because they do not have a dominant strategy.
Efficiency is an important social goal because:
A. it takes into consideration the distribution of income. B. it assures a normative outcome. C. movements toward economic efficiency make the total economic pie larger. D. it assures a fair outcome.