Comparative advantage refers to the:
A. Total amount of resources needed to produce a good.
B. Gains from trade that some countries are able to experience.
C. Comparison of production processes in two different countries.
D. Relative opportunity costs of producing a particular good.
D. Relative opportunity costs of producing a particular good.
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Some racing horse breeders keep a few of their foals and sell the others. Generally, they put the poorest quality foals up for sale early in the season. Buyers have limited information about the foals up for sale, but they know that the first foals from some breeders will not be good racers. Other breeders sell all their foals. Since buyers cannot know which breeders are keeping back their good foals, they are suspicious of all foals offered for sale early in the season, lowering the sale prices. Breeders who sell all their foals are therefore forced to hold back their better foals until later in the season, to get true market prices for them. The market for foals is therefore subject to the
A. adverse selection problem. B. moral hazard problem. C. free-rider effect. D. none of the above
The economy's current rate of interest is 10 percent and a firm has $10,000 of owner-invested capital. Its total revenue is $5000 and the firm's explicit costs are $3500. From this we know that this firm's
A) accounting profit is $500. B) economic profit is $1,500. C) accounting profit is $1,500. D) economic profit is $5,000.
Why do theater owners often set lower ticket prices for students than for adults?
What will be an ideal response?
Which of the following statements is correct?
A) TC = TFC + TVC B) TC = average product + marginal product C) TC = TFC - TVC D) TC = average physical product - marginal physical product