Suppose you can type a paper in two hours or mow the lawn in four hours, while it takes your friend Gabriela eight hours to type a paper or two hours to mow the lawn. Which of the following is true?
a. You have a comparative advantage in typing.
b. You have a comparative advantage in mowing the lawn.
c. You and Gabriela could save time if you mowed her lawn while she typed your paper.
d. You and Gabriela cannot gain from specialization and trade.
A
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The above figure shows the market for winter jackets. In an effort to keep the nation warm, the president places a price ceiling of $100 in the market for winter jackets. As a result, there is a
A) shortage equal to 150,000 jackets. B) surplus equal to 150,000 jackets. C) surplus equal to 300,000 jackets. D) shortage equal to 250,000 jackets. E) shortage equal to 100,000 jackets.
The employment effect of a minimum wage increase is greater the
a. more elastic the demand for labor. b. less elastic the demand for labor. c. more the wage ceiling shifts the supply curve. d. more the wage floor shifts the demand curve.