Tom and Jerry have two tasks to do all day: make dishes and build fences. If Tom spends all day making dishes, he will have make 16 dishes. If he instead devotes his day to building fences, Tom will build 4 fences. If Jerry spends his day making dishes, he will make 14 dishes; if he spends the day building fences, he will build 7 fences. Because Tom has a ____________ opportunity cost for one fence compared to Jerry, we know Tom has _________________________.
A. higher; the comparative advantage in fence production
B. lower; the comparative advantage in fence production
C. similar; no advantage in production of either good
D. higher; the comparative advantage in dish production
D. higher; the comparative advantage in dish production
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Which of the following statements identifies a difference between correlation and causation?
A) Correlation occurs when one thing directly affects another, whereas causation implies a mutual relationship between two things. B) Causation cannot arise when correlation is present, and correlation cannot arise when causation is present. C) Correlation implies a mutual relationship between two things, whereas causation occurs when one thing directly affects another. D) A causal relationship exists between two variables when they are correlated, but correlation does not necessarily exist if there's a causal relationship between two variables.
Refer to Table 4-13. The equations above describe the demand and supply for Aunt Maud's Premium Hand Lotion. The equilibrium price and quantity for Aunt Maud's lotion are $20 and 30 thousand units. What is the value of producer surplus?
A) $600 thousand B) $300 thousand C) $150 thousand D) $30 thousand
Product-specific services are most likely to be valuable for which of the following goods?
A) a professional camera B) a calendar C) a picture frame D) photo printing paper
A person keeps $500 in his home in order to be prepared for some unforeseen future event. This reflects his
A. precautionary demand for money. B. asset demand for money. C. liquidity demand for money. D. speculative demand for money.