George and Michael can gain from exchange
A) unless one has an absolute advantage in all goods.
B) if each specializes in the production of the good for which he has the higher opportunity cost.
C) if each specializes in the production of the good for which he has the lower opportunity cost.
D) unless they have different opportunity costs.
C
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Which of the following categories of federal spending is the largest in the United States?
A) interest on federal debt B) mandatory spending C) discretionary spending D) national defense
What would happen in the market for rental housing in your community if the local government legally mandated rents that were below the market clearing price?
A) There would be a surplus of rental housing. B) There would be a shortage of rental housing. C) The demand for rental housing would increase. D) The supply of rental housing would decrease.
In the above figure, suppose the value of the European euro is P1 and U.S. demand for French wine declines. The effect on the franc can be shown by
A) an increase in the value of the euro to P2. B) the excess demand of euro equal to Q3 - Q1. C) the decrease in the value of the euro to P0. D) a shift in the demand for euros from D1 to D0, but no change in the value of the euro.
Dr. Benson is regarded as, by far, the best dentist in his part of the country, yet his income is not significantly higher than the average income for a dentist in his area. In contrast, Bo Johnson, the best baseball player in that region, earns five times the average salary of all baseball players. The most likely explanation is that
a. the widespread perception that Dr. Benson is a great dentist is, in fact, incorrect. b. the baseball players' union is more powerful than the professional association of dentists. c. Bo Johnson, unlike Dr. Benson, can provide his services to millions of people simultaneously. d. chance plays a role in determining people's incomes, resulting in earnings discrepancies that are hard to explain or justify.