Suppose that a worker in Country A can make either 10 iPods or 5 tablets each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPods or 10 tablets each year. Country B has 200 workers. Which of the following is true? The opportunity cost of:
A. 1 iPod in Country B is 2 tablets.
B. tablets is lower in Country A than Country B.
C. 1 iPod in Country A is 2 tablets.
D. 1 tablet in Country A is 2 iPods.
Answer: D
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Allocative efficiency refers to
A) producing the goods and services most highly valued. B) using the least amount of labor to produce output. C) producing the maximum possible amount of output. D) obtaining the least output with the most inputs. E) producing at any point on the PPF.
The income elasticity of demand for store brands of soda (that is, non-name brands) is negative. What does this fact indicate about consumers' perceptions about the store brands?
What will be an ideal response?
According to the Taylor rule, if output is above its full-employment level and inflation is less than 2%
A) the Fed should raise the Fed funds rate above 4%. B) the Fed should reduce the Fed funds rate below 4%. C) the Fed should make the Fed funds rate exactly 4%. D) what the Fed should do is ambiguous.
To calculate a firm’s per unit of output profit, it is necessary to subtract
A. price from cost per unit. B. price from resource costs. C. cost per unit from product price. D. cost per unit from cost of resources.