Consider two individuals, Artie and Deena, who produce wind chimes and sun dials. Artie's and Deena's weekly productivity are shown in Table 3.4. Which of the following is TRUE?
A) Artie has a comparative advantage in producing wind chimes but not sun dials.
B) Artie has a comparative advantage in producing sun dials but not wind chimes.
C) Artie has a comparative advantage in producing both goods.
D) Artie does not have a comparative advantage in producing either good.
D
Economics
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Let the production function be q=ALaKb. The function exhibits constant returns to scale if
A) a + b = 1. B) a + b > 1. C) a + b < 1. D) Cannot be determined with the information given.
Economics
A likely consequence over time of an average-cost pricing policy for a natural monopoly is:
A. an increase in the average cost curve. B. an increase in profits. C. no change in price. D. a decrease in the average cost curve.
Economics