Assume a manager of a major league baseball team has a player that is the best pitcheron team the team. However, he decides to to have him play right field instead. It turns out that he is not the best right fielder on the team
How might this manager defend his decision?
The manager can defend the decision by arguing that his player's comparative advantage is playing right field even though his absolute advantage is playing pitcher. In other words, the manager probably surmised correctly that the team would win more games with him playing right field than they would by having him play as a pitcher. Incidentally, if it turns out that he is also a good hitter this would be a logical thing to do. If he pitches he will not have the opportunity to bat as often than if he plays right field.
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Renee plans to graduate and enter the job market in the spring. Economists are forecasting a recession during the spring. As a result, she
a. is happy because unemployment rates are low during a recession b. is happy because salaries are usually higher during a recession c. does not care because the availability of jobs is not affected by whether there is a recession d. is unhappy because it is generally difficult to find a job during a recession e. favors increasing taxes to help head off the recession
When it's cheaper to produce two or more products in one firm than to produce them in separate firms, which of the following is said to exist?
a. Horizontal integration b. Economies of scale c. Decreasing returns to scale d. Economies of scope