If individual A has comparative advantage in painting and individual B has comparative advantage in carpentry, then
A. specialization will not occur, since each does not have a clear absolute advantage.
B. individual B will specialize in painting.
C. there is a lower opportunity cost (expressed in units of carpentry) for individual A to paint than for individual B to paint.
D. individual A must use fewer hours to paint a fence than individual B.
Answer: C
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The beginning point of a graph (the 0,0 point) is known as
A. ground zero. B. mother lode. C. the origin. D. square one. E. the beginning.
The only two firms in a market are trying to decide what price to charge. The payoff matrix for this duopoly game is shown above. The payoffs are thousands of dollars of economic profit. Which of the following statements is correct?
A) If the firms play this game repeatedly, one would end up charging $20 and the other $10. B) If the firms cooperate, they could both earn $55,000 in economic profit. C) The Nash equilibrium in this game is for both firms to set P = $20 because that maximizes their combined profit. D) Firm B's strategy is to always set P= $20 because that gives Firm B the highest possible profit. E) If Firm B sets P = $20, then Firm A will maximize its profit by setting its P = $20.
Which of the following correctly defines a budget constraint?
a. A model that economists use for illustrating the choices that individuals face in a situation of scarcity b. A model that shows the level of satisfaction or pleasure that people receive from their choices c. A model that shows the combinations of output that an economy can produce, given a level of technology d. A model that represents the allocation that society most desires
Technology is an important factor in explaining the high incomes of some athletes primarily because
a. technology accounts for differences in incomes within all occupations. b. technology makes it possible for very large numbers of people to watch athletes perform. c. technology improves the performance of athletes. d. technology requires human capital to use it efficiently.