Halibut tends to be much more expensive than cod. According to the economic way of thinking, relatively high halibut prices can be explained by
A) using the theory of supply and demand.
B) pointing out the cause—Halibut boats are often more expensive than boats used to fish for cod.
C) acknowledging the price differential is unfair to consumers of halibut.
D) acknowledging the price differential is unfair to cod fishermen.
A
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Determining who receives scarce goods by the criterion of willingness to pay tends to enhance the freedom and power of people who want the goods because
A) it enables everyone to obtain at least a little of everything. B) it facilitates choice by everyone on the basis of their own specific situation. C) it gives everyone an equal chance. D) it makes sure the people who obtain scarce goods are the people who most deserve them. E) it puts genuine need ahead of politics.
A lawn service is deciding whether to add an additional employee to its summer crew. The marginal cost of hiring this worker depends on the
A) total amount paid to only the new worker. B) total amount paid to all previously hired workers. C) the total amount paid to all the workers, both the new one and the previously hired workers. D) the additional revenue created by having an additional worker minus the cost of hiring the worker.
Japan and China can both produce guns and rice. The country with the lowest opportunity cost of guns (in terms of rice) will
A. import guns. B. have a comparative advantage in guns. C. have an absolute advantage in guns. D. have a comparative advantage in rice.
Given the information in Figure 9.7, dissaving would occur at all income levels below
A. $300 billion per year. B. $200 billion per year. C. $150 billion per year. D. $100 billion per year.