Joe and Rita each have some milk and cookies (Milk on the horizontal axis). Joe's MRS of cookies for milk is 2. Rita's MRS of cookies for milk is 4. Which of the following statements is TRUE?
A) No gains from trade are possible.
B) Both Rita and Joe can be made better off if Rita gives Joe some cookies in exchange for milk.
C) Rita and Joe are on the contract curve.
D) Both Rita and Joe can be made better off if Joe gives Rita some cookies in exchange for milk.
B
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The gross domestic product of Richland during a particular year was $672,500
If the expenditure on consumption during that year was $220,000, the expenditure on investment was $250,000, the expenditure incurred by the government was $100,000, and exports was $182,000, calculate the value of imports. A) $40,000 B) $79,500 C) $100,750 D) $21,500
Suppose that you own a house. What is the opportunity cost of living in the house?
A) The opportunity cost is the rent you could have received from a tenant if you didn't live there. B) There is no opportunity cost unless you could set up a business in the house. C) There is no opportunity cost because you own the house. D) The opportunity cost is the cost of your monthly mortgage payment plus bills.