Smith and Jones comprise a two-person economy. Their hourly rates of production are shown below. CalculatorsPer HourComputersPer HourSmith10010Jones1206If Smith and Jones are dividing their time efficiently and producing more than 10 computers and fewer than 120 calculators per hour, then Smith will ________ and Jones will ________.
A. produce only computers; produce only calculators
B. produce only calculators; produce only computers
C. split his time between computers and calculators; produce only computers
D. produce only computers; split his time between computers and calculators
Answer: D
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Protecting intellectual property rights:
A. can reduce total surplus for society. B. never increases total surplus for society. C. never affects total surplus for society. D. always increases total surplus for society.
Why is a construction worker never likely to earn as much as a famous athlete?
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A basic distinction between the long run and the short run is that
A. if a firm produces no output in the long run, it still incurs a cost. B. in the long run, some inputs are fixed, while in the short run, all inputs are variable. C. the opportunity costs of production are lower in the short run than in the long run. D. in the short run, complete adjustment of all inputs is impossible, while in the long run all inputs can be adjusted.