Refer to the table below. Based on their comparative advantage, Martha should specialize in ________ while Julia should specialize in ________. Time to Make a PieTime to Make a CakeMartha60 minutes80 minutesJulia50 minutes60 minutes
A. cakes; pies
B. neither pies nor cakes; both pies and cakes
C. pies; cakes
D. both pies and cakes; neither pies nor cakes
Answer: C
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A current account deficit exists when
(a) Government revenue exceeds spending (b) Government spending exceeds revenue (c) Imports exceed exports (d) Exports exceed imports
Deleveraging is the process of reducing leverage, and therefore reducing the risk to capital from any further declines in asset prices
a. True b. False.
If the costs of coordination and enforcement are ________ the surplus lost to the externality, then ________.
A. lower than; a private solution will not work B. higher than; a private solution will work C. higher than; a private solution will not work D. None of these statements is true.
Refer to the graph below, showing the long-run supply and demand curves in a purely competitive market. We know that when this market reaches equilibrium, the marginal:
A. Cost equals marginal benefit
B. Benefit exceeds marginal cost
C. Cost exceeds marginal benefit
D. Cost equals zero