For each watch Denmark produces, it gives up the opportunity to produce 50 pounds of cheese. France can produce two watches at a cost of 150 pounds of cheese. Which of the following is true?
a. Denmark has a comparative advantage in producing both watches and cheese.
b. France has a comparative advantage in producing both watches and cheese.
c. France has the comparative advantage in producing watches.
d. Denmark has the comparative advantage in producing watches.
e. Denmark has the comparative advantage in producing cheese.
D
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If the interest rate rises, a profit-maximizing firm will tend to
A. invest in more projects (such as new plants) with payoffs in the future. B. invest in fewer projects with payoffs in the future. C. increase both current output and future output. D. reduce both current output and future output.
When a transfer price increases
a. the profits of the division producing the intermediate product will rise b. the profits of the division producing the intermediate product will fall c. the costs of the division producing the intermediate product will rise d. the costs of the division producing the intermediate product will fall
The extra cost that results from carrying out one additional unit of an activity is the ________ of the activity.
A. marginal cost B. reservation cost C. opportunity cost D. marginal benefit
Suppose demand has price elasticity of 1 everywhere and the industry is perfectly competitive with identical firms. In the long run, tax revenue increases as tax rates increase.
Answer the following statement true (T) or false (F)