ch.8 micro

Sally can type 100 words per minute while David can type 200 words per minute. Given these numbers, society would be better off if which one of the two was employed as a typist?

It depends

Use the data in the table to answer the question. The table provides data on how long it takes Maia and Juanita to mow the lawn and weed the flower beds.

Juanita because she has a lower opportunity cost

Having a comparative advantage in producing a good means that:

a country can produce the good at a lower opportunity cost than the other countries

A country that does not have an absolute advantage in the production of any good or service:

can benefit from trade by specializing in goods in which it has a comparative advantage

If Bishan wants to capitalize on comparative advantage in his life, then he should:

do more of what he is relatively good at and then trade for other things

When people focus on their comparative advantage and then trade for other things, they:

improve their standard of living or increase their leisure time

A prediction market is a market where:

payoffs are linked to whether an uncertain event occurs.

Why would a company set up internal markets?

to solve then knowledge problem

Which of the following benefits could a company gain from using internal markets?

Better allocation of its resources and more accurate predictions

If Japan can produce 3 rice cakes or 6 seaweed salads in an hour, while Indonesia can produce 2 rice cakes and 5 seaweed salads in an hour, which of the following is true?

Indonesia has a comparative advantage in producing seaweed salads

As prices _____, they provide useful business intelligence.

aggregate information

Managers can harness market forces by setting up internal markets, which:

are organized within a company to buy and sell scarce resources.

You have a comparative advantage if you can complete a task:

at a lower opportunity cost than anyone else

To get maximum output, you should allocate each task to the person who:

can do the task with the lowest opportunity cost

You have an absolute advantage in producing a product if you:

can produce the product using the fewest inputs

Specialization will increase output when it is based on:

comparative advantage

If Switzerland can produce more watches in a year than Austria, we know that Switzerland:

definitely has an absolute advantage in producing watches

If you need to make a decision and all the information needed to make a good decision is not available, then you:

have a knowledge problem

The main role of markets is:

reallocating resources to better use

Internal markets, which are markets that managers set up within their organization, are:

set up to allocate resources of a company more efficiently, often nit using real money