The ability to produce a good at lower opportunity costs than another producer is known as
A) comparative advantage.
B) marginal cost production.
C) economies of scale.
D) absolute advantage.
Answer: A
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Students in a class are assigned to groups to work on a project. A grade will be given for each project, and everyone in the group will receive that grade. For the members of a particular group, the grade is a
a. external benefit. b. public good. c. external cost. d. repeat purchase item.
Which of the following would be counted as a final good for inclusion in GDP?
a. A piece of glass bought this year by a consumer to fix a broken window. b. A sheet of glass produced this year by Ford for windows in a new car. c. None of these choices would be counted in GDP. d. A tire produced this year and sold to a car maker for a new car sold this year.
Consider an Edgeworth economy where there are two citizens, Mr. Cortopassi and Ms. Thomas. There are only two goods to be consumed in the economy, Beer and Pretzels. The total amount of Beer is 12 units. The total amount of Pretzels is 12 units. Answer the following: Suppose Mr. Cortopassi has utility for the two goods characterized as U C (B,P) = B + P. Ms. Thomas's utility function is U T (B,P) = B + P. Identify the points that are Pareto efficient.
What will be an ideal response?
Mihaela has $10 to spend. Assuming hamburgers cost $2 and milkshakes cost $1, what combination of hamburgers and milkshakes offers the highest total utility?
a. 5 hamburgers and 0 milkshakes b. 4 hamburgers and 2 milkshakes c. 3 hamburgers and 4 milkshakes d. 2 hamburgers and 6 milkshakes