What does the process of specialization do for an economy?
a. It makes it more efficient.
b. It eliminates unemployment.
c. It fosters competition.
d. It makes it easier to control.
Answer: It makes it more efficient.
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In Figure 33.4, what is the cost of labor to the firm after the imposition of the payroll tax, and how many workers will be hired?
A. W3 and L1. B. W3 and L0. C. W5 and L1. D. W3 and L2.
Microsoft requires people who purchase its operating system to also purchase its web browser. This is an example of:
A. a tie-in sale. B. competitive pricing. C. price discrimination. D. predatory pricing.
When firms are in perfect competition, the result is that firms charge a price that is always equal to its
A. AFC. B. minimum ATC. C. minimum AVC. D. MC.
Given the information in the table above, if the world equilibrium price of widgets were 40 cloths, then
A) both countries could benefit from trade with each other. B) neither country could benefit from trade with each other. C) each country will want to export the good in which it enjoys comparative advantage. D) neither country will want to export the good in which it enjoys comparative advantage. E) both countries will want to specialize in cloth.