Bob and Bill can make 16 toys each if they devote 8 working hours in a day. Further, Bob can repair 4 cars and Bill can repair 2 cars, if they devote 8 working hours in a day. When these two individuals engage in trade, it would be advantageous for both if:
a. Bob specializes in the production of toys and Bill specializes in car repairing.
b. Bob specializes in car repairing and Bill specializes in the production of toys.
c. they specialize only in car repairing.
d. they specialize only in the production of toys.
e. they distribute their working hours evenly between the production of two goods.
b
You might also like to view...
In a closed economy, without the government:
A) savings equals net exports. B) consumption equals investment. C) consumption equals savings. D) savings equals investment.
If investment becomes more interest-sensitive,
A) monetary policy will have a smaller impact on the equilibrium interest rate. B) monetary policy will have a greater impact on equilibrium income. C) fiscal policy will have a smaller impact on equilibrium income. D) fiscal policy will have a larger impact on the equilibrium interest rate.