If individual X has comparative advantage in painting and individual Y has comparative advantage in carpentry, then
A) individual X must use fewer hours to paint a fence than individual Y.
B) individual Y will specialize in painting.
C) there is a lower opportunity cost (expressed in units of carpentry) for individual X to paint than for individual Y to paint.
D) specialization will not occur, since each does not have a clear absolute advantage.
Answer: C
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If government spending is $6.2 trillion while government revenue is $6.2 trillion, the government is said to have a
A) balanced debt. B) balanced budget. C) budget surplus. D) budget deficit.
In perfect competition, if firms enter the market in the long run
A) total supply will increase causing market price to increase. B) total supply will decrease causing market price to decrease. C) total supply will decrease causing market price to increase. D) total supply will increase causing market price to decrease.
Unlike a competitive buyer,
A) a monopsonist faces an upward-sloping industry supply curve. B) a monopsonist pays a different price for each unit purchased. C) a monopsonist sets marginal value equal to marginal expenditure. D) a monopsonist pays a price that depends on the number of units purchased.
Since economists cannot use natural experiments offered by history, they must use carefully constructed laboratory experiments instead
a. True b. False Indicate whether the statement is true or false