Matt and Chloe each produce two goods. According to the principle of comparative advantage, the total output produced by these individuals will be greatest
A. if each good is produced by the individual who has the higher absolute cost of producing that good.
B. if Matt produces both goods and Chloe produces nothing.
C. if each good is produced by the individual who has the lower opportunity cost of producing that good.
D. if Chloe produces both goods and Matt produces nothing.
Answer: C
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Everything else equal, if the dollar appreciates against the Chinese yuan:
A) China will stop trading with the U.S. B) China will export more to the U.S. and will import less from the U.S. C) the Chinese government will sell yuan in the foreign exchange market. D) China will import more from the U.S. and will export less to the U.S.
Total profit = Total revenue ? Total cost (including opportunity cost). Total profit defined in this way is called
A. accounting profit. B. economic profit. C. absolute profit. D. relative profit.
Which of the following did the Fair Labor Standards Act (FLSA) of 1938 not accomplish?
a. Lowered the maximum work week to 44 hours for many industries. b. Outlawed companies' rights to break union strikes. c. Prohibited many forms of child labor. d. Set a minimum wage for laborers.
Following a decrease in the price of a good, an individual will purchase more of the now less expensive good and less of other more expensive goods. This is known as the _____ effect
a. income b. endowment c. substitution d. price e. scale