Suppose that opportunity costs are constant and that Fred can either bake a maximum of six pies or three cakes in a day. Ethel can produce a maximum of eight pies or two cakes in a day. Ethel has an comparative advantage in the production of
A) cakes.
B) pies.
C) both cakes and pies.
D) neither cakes nor pies.
Answer: B
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Refer to the scenario above. If the rules of the gamble are changed such that in the case of heads, the individual wins $100, and in the case of tails, the individual loses $50, the expected value of the gamble changes to:
A) $0. B) $25. C) $50. D) $75.
High fuel prices and losses by smaller firms have resulted in a considerable amount of consolidation in the trucking industry, which now most closely resembles the oligopoly market structure
Indicate whether the statement is true or false
When the economy is operating well below capacity, an increase in spending tends to be reflected primarily in a(n):
a. lower level of employment. b. increase in price. c. lower level of output. d. higher level of output and employment. e. increase in business failures.
Carolina Baby Inc produces and sells dresses for kids in a perfectly competitive market. Which of the following will be the firm's profit-maximizing outcome?
a. The firm earns a marginal revenue of $20 if it produces 600 dresses at a marginal cost of $15. b. The firm earns a marginal revenue of $20 if it produces 700 dresses at a marginal cost of $20. c. The firm earns a marginal revenue of $20 if it produces 800 dresses at a marginal cost of $24. d. The firm earns a marginal revenue of $20 if it produces 900 dresses at a marginal cost of $27.