Related to the Economics in Practice on page 26: Which one of the following occurs when an individual enters the paid work force?
A. The opportunity cost of time for housework decreases, because as more people enter the work force, businesses have greater incentives to develop innovations that make housework more efficient.
B. The opportunity cost of time for housework increases, because time spent on housework could be spent on money-earning activities.
C. The opportunity cost of time for housework increases, because money earned at a job can allow individuals to pay someone to do household chores that the individuals used to do themselves.
D. The opportunity cost of time for housework decreases, because increased earning power makes individuals less likely to do their own housework.
Answer: B
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If the opportunity cost of 1 wristwatch is 4 wall clocks in Japan and 2 wall clocks in Germany, it makes sense for Japan to produce wristwatches
Indicate whether the statement is true or false
Refer to Figure 4-6. What area represents the deadweight loss at the equilibrium price of P1?
A) G + H B) C + E C) C + E + H D) There is no deadweight loss at the price of P1.