Amy can produce either 5,000 pounds of cheese or 20 cars per year. Mike can produce either 5,000 pounds of cheese or 10 cars per year. By the principle of comparative advantage, Mike should specialize in producing

The efficient level of paper production will occur where the

A) marginal private benefit from consuming paper is equal to the marginal social cost of production. B) marginal social benefit from consuming paper is equal to the marginal social cost of production. C) production of paper no longer produces negative externalities. D) economically efficient level of the output of paper is equal to the economically efficient level of inputs.

Which of the following equations best represents a Cobb-Douglas production function?

A) Y = AK1L1 B) Y = AK3/4L1/4 C) Y = AK1/3L3 D) Y = AK2/3L3/2