If one is producing well within a production possibilities frontier, they are
A) using resources to the best of their ability.
B) using resources at the lowest opportunity cost.
C) using resources in an inefficient way.
D) using resources in a way that maximizes their comparative advantage.
C
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The opportunity cost of producing a laptop is lower in Laborland than in Utopia while the opportunity cost of producing wheat is lower in Utopia than in Laborland. However, Laborland can produce more of both the goods
i) Can mutually beneficial trade take place between the two countries? Explain your answer. ii) Which country should specialize in the production of which good?
The figure above shows the demand for and supply of labor of students in Smallville. If the minimum wage is set at $8 per hour, how many hours do students work?
A) 12,000 hours B) 9,000 hours C) 6,000 hours D) None of the above answers is correct.