If Elizabeth can make 3 pies or bake 6 cakes per hour and Benjamin can make 2 pies or bake 8 cakes per hour, _____.
(A) Benjamin has the comparative advantage in making pies.
(B) Elizabeth has the comparative advantage in baking cakes.
(C) Benjamin should specialize in making pies.
(D) Elizabeth should specialize in making pies.
Ans: (D) Elizabeth should specialize in making pies.
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The competitive firm's supply curve is equal to
A) its marginal cost curve. B) the portion of its marginal cost curve that lies above AC. C) the portion of its marginal cost curve that lies above AVC. D) the portion of its marginal cost curve that lies above AFC.
Which of the following is an example of an externality?
a. Annie purchases a new dress. b. Antonio's dog barks loudly during the night, waking his neighbors. c. Harold sells a book to Cathy, who reads the book and then gives it to James as a gift. d. Gloria watches a scary movie.