Liz has a comparative advantage in ________ because ________
A) smoothies; she can produce more smoothies per hour than Joe can
B) salads; she can produce more salads per hour than Joe can
C) smoothies; her opportunity cost of producing smoothies is lower than Joe's
D) both goods; she can produce more of both goods per hour than Joe can
E) salads; her opportunity cost of producing salads is lower than Joe's
C
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According to the text, the Fed and other policy makers are concerned about:
A. inflation rates that are too high only. B. inflation rates that are either too high or too low compared to its set target. C. inflations rates that are too low only. D. annual inflations rates that exceed 10%.
Which of the following does NOT affect the long-run aggregate supply curve?
A) technology B) endowments of resources C) price level D) production possibilities curve
In the DMP model
A) the market wage is equal to the marginal product of labor. B) the market wage is equal to the marginal rate of substitution of leisure for consumption. C) the wage is equal to the marginal rate of transformation. D) the wage is determined by bargaining between the firm and the worker.
The market clearing price of a good is
A) the price at which there is at least some of the good available for everyone. B) the price at which there is no surplus and no shortage. C) the price that consumers prefer. D) the price that producers prefer.