A written contract between an employer and an employee creates value as long as:
a. the benefits exceed the costs of forming and enforcing it.
b. the productivity of the employee is equivalent to the wage.
c. on-the-job learning is unimportant.
d. the relationship between the employer and the employee is short-term.
A
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Suppose that Canada can produce 15 timber or 3 film and Mexico can produce 9 timber or 3 film. Suppose that opportunity costs are constant. Which of the following is FALSE?
A) Canada has an absolute advantage in timber production. B) Mexico has a comparative advantage in film production. C) The opportunity costs for producing timber are lower in Canada than in Mexico. D) Canada and Mexico would find trade mutually advantageous at a ratio of one unit of film to six units of timber.
Imagine you own a machine that produces perfectly authentic and legal $100 bills. You would use this machine until:
a. the bills became worthless. b. the total cost began to fall. c. the marginal cost was $100. d. the variable cost began to rise. e. the marginal revenue began to fall.