Suppose Ethan and Ava work in a farm that grows apples and oranges of the same size. In one hour, Ethan can pick 6 pounds of apples or 1 pound of oranges. Ava can pick 8 pounds of apples or 1 pound of oranges. It can be concluded that
A. Ethan has a comparative advantage in picking apples.
B. Ava has an absolute advantage in picking oranges.
C. Ethan has an absolute advantage in picking apples.
D. Ava has a comparative advantage in picking apples.
Answer: D
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A complete information game is a special case of an incomplete information game -- where "Nature" assigns each player a "type" with probability 1.
Answer the following statement true (T) or false (F)
Refer to Figure 15-12. In the dynamic AD-AS model, if the economy is at point A in year 1 and is expected to go to point B in year 2, the Federal Reserve would most likely
A) increase the inflation rate. B) decrease interest rates. C) not change interest rates. D) increase interest rates.
Which of the following statements best describes consumer surplus in the supply and demand model?
a. Consumer surplus is the area in the supply and demand model that is above the market price and above the demand curve. b. Consumer surplus is the area in the supply and demand model that is below the market price and below the demand curve. c. Consumer surplus is the area in the supply and demand model that is above the market price and below the demand curve. d. Consumer surplus is the area in the supply and demand model that is below the market price and above the demand curve.
You read a story in the newspaper about the "economies of mass production." This means that
A. fixed cost is less at larger levels of production. B. total cost is less at larger levels of production. C. marginal cost is less at larger levels of production. D. long-run average cost is less at larger levels of production.