Comparative advantage in production of a good occurs
A. when a country can produce that good using fewer resources than could other countries.
B. when a country can produce that good at a greater opportunity cost than could other countries.
C. when a country can produce that good at a lower opportunity cost than could other countries.
D. when a country has a greater supply of natural resources required to produce that good, compared to other countries.
Ans: C. when a country can produce that good at a lower opportunity cost than could other countries.
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An editorial in the paper argues that a person only should be allowed to attend school if the marginal cost of educating that person is less than the marginal benefit of educating that person. The writer's reasoning is an application of:
A. positive economics. B. normative economics. C. negative economics. D. economic naturalism.
The profit-maximizing level of output for a perfectly competitive firm is socially efficient, while the profit-maximizing level of output for a monopolist is not because under perfect competition ________, while under monopoly ________.
A. P = MR; P < MR B. P = MC; P < MC C. P < MR; P = MR D. P = MC; P > MC
Suppose Smith's oil refinery and Jones' paper mill both pollute a river and both firms operate under a system of marketable pollution permits. If it costs Smith $45 to reduce pollution by 500 gallons per day, and Jones can reduce costs by $65 by increasing pollution by 500 units per day:
A. the firms cannot gain by trading the right to pollute. B. both firms can benefit if Smith trades the right to increase pollution by 500 gallons to Jones for $30. C. both firms can benefit if Smith trades the right to increase pollution by 500 gallons to Jones for $50. D. both firms can benefit if Jones trades the right to increase pollution by 500 gallons to Smith for $30.
If the government were to regulate the way AT&T presents its phone plans, such a policy would be a:
A. tariff. B. nudge. C. tax. D. push.