Amy can produce either 5000 pounds of cheese or 20 cars per year. Mike can produce either 5000 pounds of cheese or 10 cars per year. By the principle of comparative advantage, Amy should specialize in producing
A. cars.
B. cheese.
C. both cheese and cars.
D. neither cheese nor cars.
Answer: A
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Monopolists
A) maximize revenue, not profits. B) have no short-run fixed costs. C) face downward sloping demand curves. D) are price takers.
In the production function Y = AF(K, N), A is ________, K is ________, and N is ________
A) total factor productivity; the capital stock; the number of workers employed B) total factor productivity; investment; the number of workers employed C) the productivity of labor; the capital stock; the size of the labor force D) the productivity of labor; investment; the size of the labor force
The specialty of Lloyd's of London is
A) annuities. B) hedge funds. C) mutual funds. D) reinsurance.
Extensive advertising will always lead to an increase in average total cost for the firm
a. True b. False Indicate whether the statement is true or false