Suppose that a worker in Country A can make either 25 bananas or 5 tomatoes each year. Country A has 200 workers. Suppose a worker in Country B can make either 18 bananas or 6 tomatoes each year. Country B has 400 workers. For a worker in Country A, the trade-off of making one tomato is:
A. 2 bananas.
B. 3 bananas.
C. 4 bananas.
D. 5 bananas.
D. 5 bananas.
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A wage rate that is adjusted for changes in the price level is known as the
A) nominal wage. B) minimum wage. C) functional wage. D) real wage.
Roger and Brian have a discussion about cost minimization in firms during a recession. Roger stresses that company can reduce its costs by paying workers lower wages during a recession
a. Brian disagrees and argues that a company cannot reduce wages as price levels and wages do not adjust easily in the short run. Who do you think is correct? Give reasons to support your answer.
Government action will often result in the counterproductive use of resources because
a. there is often a conflict between winning political elections and adoption of only productive programs. b. many politicians are not interested in how their legislative votes will influence their chances of winning future elections. c. politicians are often unwilling to listen to interest groups that have specialized knowledge. d. voter participation is low; if more people voted, the political process would be more efficient.
What is Spain's domestic exchange equation?
