A perfectly competitive firm is a "price taker" because it cannot sell its product for more than the market price

Using the figure above, if Jack and Jill specialize and gain from trade, then

A) Jack specializes on the production of soda and water. B) Jack specializes in the production of soda. C) Jack produces equal amounts of gallons of water and bottled water. D) Jack specializes in the production of bottled water. E) Jack and Jill produce beyond their PPF.

In 2010, the co-chairmen of President Obama's deficit reduction commission proposed curtailing or eliminating the mortgage interest deduction that millions of homeowner taxpayers receive every year. Economists who favor the proposal would argue that (i) too much of the economy's capital stock is tied up in residential housing. (ii) too little of the economy's capital stock is invested in

corporate capital. (iii) the misallocation of resources results in lower productivity and reduced real wages. a. (i) only b. (ii) only c. (i) and (ii) only d. (i), (ii), and (iii)