An economy has two workers, Jen and Rich. Every day they work, Jen can produce 2 TVs or 10 radios, and Rich can produce 4 TVs or 12 radios. What is the most of each type that can be produced per day if each worker fully specializes according to his/her comparative advantage?
A. 5 TVs and 12 radios
B. 4 TVs and 10 radios
C. 2 TVs and 6 radios
D. 3 TVs and 8 radios
Answer: B
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A reduction in current consumption to pay for the investment in capital intended to increase future production is known as the:
A. consumption effect. B. substitution effect. C. investment trade-off. D. income effect.
In this graph
A. saving is negative at all levels of disposable income.
B. saving is negative when disposable income is below 2000.
C. saving is negative when disposable income equals 2000.
D. saving is negative when disposable income is above 2000.
You do not worry about how your bank is investing your money because your deposits are federally insured. This is an example of:
A. a positive spillover. B. moral hazard. C. adverse selection. D. irrational behavior.
Describe why monopolistically competitive firms find it important to establish brand loyalty.
What will be an ideal response?