Chapter 6 - Gains from trade
When a manager uses comparative advantage to assign tasks in a workplace, then each:
Task is assigned to the worker with the lowest opp cost for performing the task
Economists generally believe that a person should specialize in the production of a good or service if
They can produce the product while forgoing fewer alternative products that any other person
Cornell can type reports faster and more accuratly than alice, so cornell has an ______ in typing reports
absolute advantage
Price is functioning as a message when it
is a line of communication between buyers and sellers in the market
you pay a plumber to install a new dishwasher in your home. which statement is false?
only the plumber experiences gains from trade because they received money
As long as people have different ________, everyone has a comparative advantage in something.
opp cost
A prediction market is a market where
payoffs are linked to whether an uncertain event occurs.
When a country's production mix becomes more specialized due to increased international trade based on CA
some industries in the country will shrink and possible disappear
why does apply design the Iphone in california but assemble it in china?
the US has a comparative advantage in iphone design
Chantelle grows tomatoes and sells them at the farmers market. because the price of tomatoes rises, she is encouraged to grow and sell more. This is an example of price functioning as an
Incentive
During covid, global supply chain issues caused the supply of new cars to shift left. which role did price play in the new car market? Price was a
Message to potential buyers that the marginal cost of manufacturing new cars is rising
When trade is based on comparative advantage...
Both trading partners end up better off than when there is no trade
on camping trips, katie is much faster than her hubby, brett, at putting up a tent and starting a fire. Who should do each task if they want to maximize their time sitting around the fire
They should first each focus on that task in which they have a CA. when one finishes their assigned task they will move on to help.
Which benefit could a company gain from using internal markets
Better allocation of its resource and more accurate predictions
