If one nation is able to produce a good at a lower opportunity cost than another, it has
A) an absolute advantage in that good.
B) a comparative advantage in that good.
C) a productivity advantage in that good.
D) a technological advantage in that good.
B
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Donnie's Donuts incurs $450,000 per year in explicit costs and $200,000 in implicit costs. The bakery earns $800,000 in revenues and has $2 million in net worth. Based on this information, what is the economic profit for Donnie's Donuts?
A) $150,000 B) $350,000 C) $600,000 D) $1.2 million
Studies on consumer behavior have found that most people value fairness enough that they will refuse to participate in transactions they consider unfair, even if they are worse off as a result. How does this affect a firm's decision to raise prices in
the event of a temporary increase in demand? What will be an ideal response?