Papa Ray owns a pizzeria. He is more efficient at making pizza than anyone he could hire. Does this mean that he should make all of the pizzas himself?
What will be an ideal response?
No. This simply means that Papa Ray has an absolute advantage in making pizza. This does not mean that he has a comparative advantage in making pizza. It is possible that the opportunity cost of his time is high (he could be out selling franchises, for example).
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The ratio of retirees to workers who make contributions to the Social Security system ________
A) has increased over the years B) increased as a result of the baby boom following World War II, but has subsequently declined C) has fallen with the decline in U.S. birth rates D) determines the size of contributions to the system
Which of the following is NOT a reason why some industries are oligopolies?
A) economies of scale B) barriers to entry C) strategic independence D) mergers
Which of the following is an example of a price floor?
A. Stock prices hit a floor lastnight B. Safeway charges $1 more than Fred Meyer charges for a 5 pound bag of sugar C. The government guarantees that potato farmers will receive at least $50 a ton D. The lowest price of gasoline this year was $2 per gallon
A perfectly competitive apple farm produces 1,000 bushels of apples at a total cost of $36,000. The price of each bushel is $50. Calculate the firm's short-run profit or loss
A) loss of $14,000 B) profit of $14,000 C) profit of $50,000 D) There is insufficient information to answer the question.