A person has a comparative advantage in an activity whenever she
A) has an absolute advantage in the activity.
B) can perform the activity at a lower opportunity cost than another person can.
C) can do the activity in less time than anyone else.
D) can do everything better than anyone else.
Answer: B
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A labor market is divided into two segments. All workers have the same qualifications and find jobs in either segment equally attractive. Initially, both segments are in competitive equilibrium. Then the development of employer prejudice reduces employment of minorities in one segment. In the long run, there will likely be a change in
a. wage rates and the composition of the work force in both segments b. neither wage rates nor the composition of the work force in either segments c. wage rates, but not the composition of the work force, in both segments d. the composition of the work force, but not wage rates, in both segments e. the wage rate, but not the composition of work force, in the discriminating segment only
Suppose a patent applicant approaches an insurance company and seeks to purchase an insurance policy that her patent will not net $1m in the next three years. The insurance company
A) will sell her an insurance policy because the proposal entails uncertainty not risk. B) will sell her an insurance policy because the proposal entails risk not uncertainty. C) will not sell her an insurance policy because the proposal entails uncertainty not risk. D) will not sell her an insurance policy because the proposal entails risk not uncertainty.
A quota ________ a deadweight loss and a tariff ________ a deadweight loss
A) creates; creates B) creates; does not create C) does not create; creates D) does not create; does not create E) might create; might create
In the Keynesian model, the difference between no intervention by the government during a recession and intervention using expansionary monetary or fiscal policy is that no intervention will return the economy to its equilibrium level of output
A) faster than intervention will and at a lower price level. B) slower than intervention will and at a higher price level. C) slower than intervention will and at a lower price level. D) faster than intervention will and at a higher price level.