Refer to Figure 2-13. Which country has a comparative advantage in the production of coconuts?
A) Guatemala B) Costa Rica
C) They have equal productive abilities. D) neither country
A
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Firms in monopolistic competition determine the profit-maximizing level of output by producing
A) the same output level as rivals do. B) where average total cost is minimized. C) at the point of minimum average fixed cost. D) where marginal revenue equals marginal cost. E) where price equals average total cost.
A person who has taken medical leave is
A) in the labor force. B) not in the labor force. C) unemployed. D) a job leaver.
An adverse supply shock shifts the short-run Phillips curve to the
a. right. This means the unemployment rate is higher at each inflation rate. b. right. This means the unemployment rate is lower at each inflation rate. c. left. This means the unemployment rate is higher at each inflation rate. d. left. This means the unemployment rate is lower at each inflation rate.
Two economists are debating whether to remove a tariff on luxury vehicles. They agree that consumers will benefit by $5 billion and that the harm done to domestic businesses and workers will be only $4 billion. One argues that these facts make it obvious that the tariff should be removed. The other disagrees. What would be a likely reason for the second economist to disagree?
A. He or she has a different interpretation of the empirical evidence. B. He or she has different value judgments about the weights that should be put on the benefits and costs. C. There is no good reason because the benefits outweigh the costs. D. He or she is using a different economic model to understand the world.