Which of the following is the most accurate definition of a worker's marginal revenue product?
A. The change in the firm's profits as the result of hiring an additional worker.
B. The change in the firm's total revenue as the result of hiring an additional worker.
C. The change in the firm's output as the result of hiring an additional worker.
D. The change in the firm's cost as the result of hiring an additional worker.
Answer: B
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Refer to the scenario above. What is the net present value of buying the warranty?
A) $3.75 B) -$10.18 C) $15.54 D) -$30
An examination of the Ricardian model of comparative advantage yields the clear result that trade is (potentially) beneficial for each of the two trading partners since it allows for an expanded consumption choice for each
However, for the world as a whole the expansion of production of one product must involve a decrease in the availability of the other, so that it is not clear that trade is better for the world as a whole as compared to an initial situation of non-trade (but efficient production in each country). Are there in fact gains from trade for the world as a whole? Explain.