Suppose that a worker in Country A can make either 10 iPods or 5 tablets each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPods or 10 tablets each year. Country B has 200 workers. Country B has the comparative advantage in the production of:
A. iPods only.
B. tablets only.
C. both iPods and tablets.
D. neither iPods nor tablets.
B. tablets only.
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If Project X has a cost of $6 and provides a benefit of $10, and Project Y has a cost of $25 and provides a benefit of $27, which of the following statements is true?
A) An individual can optimize by choosing Project X. B) An individual can optimize by choosing Project Y. C) Switching from Project X to Project Y increases net benefit by $2. D) Switching from Project Y to Project X decreases net benefit by $2.
Which of the following is an example of an externality?
A. The reduction in health risks when Tom’s family receives a measles vaccine B. Robert’s purchase of a new car C. A firm’s investment of new computer technology D. Eric’s choice to buy a new lawn mower
Which of the following statements is correct?
a. A decrease of government spending is most effective in the flat part of the SRAS curve. b. An increase in interest rates is most effective in the flat part of the SRAS curve. c. An increase in the money supply is most effective in the steep part of the SRAS curve. d. A tax increase is most effective in the steep part of the SRAS curve.
When determining her accounting profit, an entrepreneur would include
A) her foregone wages. B) her foregone interest. C) her foregone rent. D) all of the above. E) none of the above.