Specialization can occur because
A. governments pass laws that require it.
B. varying skills differentiate workers.
C. managers and laborers share job tasks.
D. absolute advantage creates specialization among laborers.
Answer: B
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A consumer's demand for CDs can be represented by a line with slope -b and intercept a. If the current price of CDs is $P, then the ratio of consumer surplus to total expenditures on CDs equals
A) (a - P)(a - bP). B) 1/2(a - P)(a - bP). C) D(a - bP). D) (a - P)/P. E) (a/b - P)/(2P).
A professional basketball players' union negotiates a contract that dramatically increases all players' salaries. How would this influence the opportunity cost for a player who was considering giving up basketball to pursue a career in broadcasting?
a. It would not affect the opportunity cost of playing basketball or of broadcasting. b. It would increase the opportunity cost of continuing to play professional basketball. c. It would cause the production possibilities frontier to become convex. d. It would increase the opportunity cost of becoming a broadcaster. e. It should have no bearing on the player's decision from an economic standpoint.