Comparative advantage is determined by
a. the amount of resources needed to produce a good
b. the money cost of producing any good
c. the opportunity cost of producing any good
d. absolute advantage and production possibilities combined
e. the level of demand for a good
C
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Terry wants to sell his car and the lowest price he is willing to accept is $3,000 . Alice likes the car and is willing to pay at most $4,000 for it. They begin to negotiate to arrive at a price. Which of the following statements will be true?
a. They are playing a zero-sum game. b. The higher the price they agree on, the greater the benefit to both. c. The longer they take to arrive at an agreed price, the lower the benefit to them. d. They are playing a positive-sum game where their benefits add up to $1,000.
If a firm refuses to hire any females due to a personal prejudice, its profits will
a. increase markedly. b. decrease. c. not be affected. d. increase slightly.
A number of factors are believed to have caused changes in the natural rate of unemployment in the United States during the 1990s. Briefly comment on each of these factors
What will be an ideal response?
A firm sells a product in a purely competitive market. The marginal cost of the product at the current output of 1,000 units is $2.50. The minimum possible average variable cost is $2.00. The market price of the product is $2.50. To maximize profits or minimize losses, the firm should:
A. Continue producing 1,000 units B. Continue production, but produce less than 1,000 units C. Increase production to more than 1,000 units D. Shut down