"When a person is more productive in producing a good or service than another person, the first person has the comparative advantage in producing the good." Is this assertion correct or incorrect? Explain your answer
What will be an ideal response?
The assertion is incorrect. The statement describes an absolute advantage, that is, a person has an absolute advantage in the production of a good if the person can produce more of it in a given time period than someone else. Comparative advantage, however, relies on a comparison of opportunity costs. A person has a comparative advantage in producing a good if the person can produce the good at a lower opportunity cost than another person.
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Which statement is true regarding a market in equilibrium
a. There is a shortage of the good. b. There is a surplus of the good. c. Neither demanders or suppliers are satisfied. d. Both demanders and suppliers are satisfied.
If real GDP grows at a rate of 6 percent and population grows at a rate of 2 percent, then real GDP per person grows at a rate of
A) -3 percent. B) 8 percent. C) 2 percent. D) 4 percent. E) 0.5 percent.
Comment on the following statement: "As the market wage rises, the firm is likely to hireless labor."
What will be an ideal response?
If a firm could practice perfect price discrimination, it would
A) allow resale of its product. B) use odd pricing. C) charge every buyer a different price. D) charge a price based on the quantity of a product bought.