Mac can bake more cookies than Monica per hour. It must be true that
A) Monica has an absolute advantage in cookie baking.
B) Mac has an absolute advantage in baking cookies.
C) Mac has a comparative advantage in baking cookies.
D) Monica has a comparative advantage in baking cookies.
E) Mac cannot benefit by trade between the two of them.
B
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The fact that output gaps will not last indefinitely, but will be closed by rising or falling inflation is the economy's:
A. income-expenditure multiplier. B. self-correcting property. C. short-run equilibrium property. D. long-run equilibrium property.
Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
For a monopoly firm, which of the following equalities is always true?
a. price = marginal revenue b. price = average revenue c. price = total revenue d. marginal revenue = marginal cost
If John's marginal utility derived from the consumption of another candy bar is 1 and the price of the candy bar is $1.50, then
a. this is the last candy bar John will purchase since the marginal utility is less than the price. b. the opportunity cost of the candy bar is less than $1.50. c. if John purchases and consumes the candy bar his total satisfaction will go down because the marginal utility is less than the price. d. there is not enough information to determine if John will or will not purchase the candy bar.