Juanita, a lawyer, can type faster than Jill, her secretary. Jill, on the other hand, does not have the ability or skills to practice law. Applying the principles of international trade to this situation, an economic consultant advises Juanita to
a. fire Jill, practice law and do the typing because she's better at both
b. practice law and leave all the typing to Jill
c. divide her time equally between typing and practicing law
d. quit law and concentrate on typing because that's her comparative advantage
e. quit law and concentrate on typing because that's her absolute advantage
B
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The above figure shows the marginal social benefit and marginal social cost curves of coffee in the nation of Kaffenia. When marginal social benefit is equal to the marginal social cost of coffee in Kaffenia
A) three hundred pounds per day will be produced and consumed. B) the efficient quantity of coffee is being produced and consumed. C) any decrease in coffee consumption or production would result in a deadweight loss. D) All of the above are correct.
If an economy is operating on its production possibilities curve, it is:
A) efficient and fully employed. B) fully employed but not necessarily efficient. C) efficiently producing but not necessarily fully employed. D) inevitably going to grow in the future.