If Sean sells Tom a tennis racket for 50$, we would expect
What will be an ideal response?
Both parties to gain from this transaction.
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To make the calculation of real GDP more accurate, in 1996 the BEA switched to using
A) base-year prices. B) chain-weighted prices. C) current prices. D) market prices.
Suppose Russia exports sunflower seeds to Ireland and imports coffee from Brazil. This situation suggests
a. Russia has a comparative advantage over Brazil in producing coffee, and Ireland has a comparative advantage over Russia in producing sunflower seeds. b. Russia has a comparative advantage over Ireland in producing sunflower seeds, and Brazil has a comparative advantage over Russia in producing coffee. c. Russia has an absolute advantage over Ireland in producing sunflower seeds, and Brazil has an absolute advantage over Russia in producing coffee. d. Russia has an absolute advantage over Brazil in producing coffee, and Ireland has an absolute advantage over Russia in producing sunflower seeds.
For a given firm, whenever the ratio of marginal product to input price differs across inputs,
A. it will always be possible to make a cost-saving substitution in favor of the input with the higher MP/P ratio. B. the market will adjust the price of the higher priced input. C. the market will adjust the price of the lower priced input. D. it will always be possible to make a cost-saving substitution in favor of the input with the lower MP/P ratio (except in the case of corner solutions).
Allocative efficiency occurs where:
a. the price of a good is less than the marginal cost of producing it. b. the price of a good is greater than the marginal cost of producing it. c. the price of a good is equal to the marginal cost of producing it. d. the greatest quantity of output is available for sale.