Jimbo has a comparative advantage over Ned in producing a good if
A. Jimbo can produce more of the good than Ned can in a given time period.
B. Jimbo has a lower opportunity cost of producing the good than does Ned.
C. Jimbo has to trade off more than Ned does to produce the good.
D. Jimbo has a higher opportunity cost of producing the good than does Ned.
Answer: B
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A firm's Lerner Index:
A. is the amount by which its price exceeds its marginal cost, expressed as a percentage of its price. B. is the amount by which its marginal cost exceeds its average cost. C. is the amount by which its average cost exceeds its marginal cost. D. is the value of its profit.
Extremely large budget deficits may lead to
a. low inflation. b. low employment. c. high unemployment. d. high inflation.
GDP includes
The value and cost of goods are easiest to determine when the goods are
a. private goods. b. public goods. c. common resources. d. club goods.