You have noticed that your next-door neighbor, Mary, always works in the garden, and her husband, Joe, always walks the dog. You conclude that if Joe and Mary are efficient, then it must be the case that:
A. Joe has a comparative advantage in walking the dog.
B. Joe experiences increasing opportunity costs when he gardens, but not when he walks the dog.
C. Mary's opportunity cost of walking the dog is lower than Joe's.
D. Mary has an absolute advantage in gardening.
Answer: A
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Suppose, that your community has identified five different areas of town that are polluted and has assigned clean-up projects to each area: projects A through E in the table below. For simplicity, let's assume that the marginal cost of each project is $75,000. The marginal benefit to the community, however, is different for each and listed in the table below. If your city has enough money to pay for all five projects, which areas should it clean up?ProjectMarginal BenefitA$150,000B125,000C100,000D75,000E50,000
A. A, B, C and D B. C, D, and E C. D and E D. E
What are the information costs faced by savers?
What will be an ideal response?
A major contributor to a country's real rate of economic growth is its real GDP growth relative to its
A) inflation. B) unemployment rate. C) money growth. D) none of the above.
Which of the following is true about inflation? a. Inflation promotes social harmony by uniting people against the government
b. Inflation is more damaging if it is unanticipated. c. Accurate anticipation of inflation is possible for everyone who is well informed about economic events. d. Those who lend money at a rate above the rate of inflation suffer economic losses. e. If people accurately anticipate inflation, their actions will prevent it.