(Consider This) Madison, the CPA, is faster than Mason, the house painter, at both accounting services and painting. This means that:
A. there is no reason for them to trade services.
B. Madison should trade her accounting services for Mason's painting services, so long as Madison is relatively more efficient at accounting services.
C. Madison should trade her accounting services for Mason's painting services, so long as
Madison is relatively more efficient at painting.
D. Madison has the comparative advantage in both services.
B. Madison should trade her accounting services for Mason's painting services, so long as Madison is relatively more efficient at accounting services.
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Elvira decreased her consumption of bananas when the price of peanut butter increased. For Elvira, peanut butter and bananas are
A) complements in consumption. B) both luxury goods. C) both inferior goods. D) substitutes in consumption.
On the graph above, suppose the economy is at point F when there is a permanent positive supply shock. The new long-run equilibrium is at point ________
A) F B) H C) I D) G E) none of the above