Kathy and Amy paint pictures and do caricatures to sell to tourists. In one day, Kathy can either paint two pictures or do four caricatures. In one day, Amy can either paint three pictures or do three caricatures
For both Kathy and Amy, what is the opportunity cost of painting one picture? Who has the comparative advantage in painting pictures and who has the comparative advantage in doing caricatures? How might they be able to increase their total output?
Kathy's opportunity cost of painting a picture is two caricatures. Amy's opportunity cost of painting a picture is one caricature. Amy has a comparative advantage in painting and Kathy has a comparative advantage in doing caricatures. They could increase output by specializing in producing the goods for which they have a comparative advantage.
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Consumption spending includes
a. durable goods, nondurable goods, and housing b. durable goods, nondurable goods, and imports c. durable goods, services, and housing d. durable goods, nondurable goods, and services e. nondurable goods, services, and housing
We can tell from data in exhibit 9-2 that planned investment is autonomous because
What will be an ideal response?
The population of a small town is 5,000. There are 4,000 people in the labor force, and 3,500 people are employed. The unemployment rate equals
A. 5 percent. B. 10 percent. C. 12.5 percent. D. 35 percent
Subway is a fast-food restaurant chain. Which of the following would be a long-run decision for Subway?
A. hire one more worker in a restaurant location B. supply more subs in one restaurant C. replace the manager of a restaurant D. open a new restaurant in a city