A dedicated professor loves being in the classroom and would teach for $70,000 per year, but he is actually paid $80,000 per year. This individual
A) receives economic rent of $150,000.
B) has an opportunity cost of $80,000.
C) has an opportunity cost of $70,000.
D) receives economic rent of $10,000.
Answer: D
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It is profitable to hire more labor if the price level ________ and the money wage rate ________
A) rises; falls B) rises; rises by the same percentage C) falls; does not change D) falls; rises E) does not change; rises
Which of the following statements about comparative advantage is FALSE?
A. International trade will benefit an entire economy, but some particular groups of people may be hurt by expanding trade. B. A country's comparative advantage cannot be determined by looking only at its own economy. C. Expanding international trade hurts a nation's economy if it causes the nation's currency to depreciate. D. There is always a trade between two countries that can make both better off.