Chapter 1, 3 and 4 macaroons

arb and Jim run a business that sets up and tests computers. Assume that Barb and Jim can switch between setting up and testing computers at a constant rate. The following table applies. The number of minutes needed by Barb to test a computer is

60

Which of the following statements best represents the principle represented by the adage, "There ain't no such thing as a free lunch"?

. Dani must decide between going to Florida or Brazil for spring break

Assume that Jamaica and Norway can switch between producing coolers and producing radios at a constant rate. At which of the following prices would both Jamaica and Norway gain from trade with each other?

1 radio for 4 coolers

Assume that Max and Min can switch between producing mittens and producing hats at a constant rate. Refer to Table 3-6. Which of the following points would not be on Max's production possibilities frontier, based on a 36-hour production period?

2 mittens, 6 hats

Refer to Figure 3-3. If Arturo and Dina each divides his/her time equally between the production of tacos and burritos, then total production is

400 tacos and 250 burritos.

Refer to Figure 3-4. If point A represents Alice's current production and point B represents Betty's current production, under what circumstances can both Alice and Betty benefit from specialization and trade?

Alice produces more lemonade and Betty produces more pizzas.

Assume that Aruba and Iceland can switch between producing coolers and producing radios at a constant rate.

Refer to Table 3-3. Assume that Aruba and Iceland each has 80 labor hours available. If each country divides its time equally between the production of coolers and radios, then total production is

market failure

a situation in which the market on its own fails to allocate resources efficiently.

The producer that requires a smaller quantity of inputs to produce a certain amount of a good, relative to the quantities of inputs required by other producers to produce the same amount of that good,

as a low opportunity cost of producing that good, relative to the opportunity costs of other producers.

Refer to Figure 3-3. If the production possibilities frontier shown for Arturo is for 100 hours of production, then how long does it take Arturo to make one burrito?

b. 1/3 hour

A worker in Vietnam can earn $6 per day making cotton cloth on a hand loom. A worker in the United States can earn $85 per day making cotton cloth with a mechanical loom. What is the likely explanation for the difference in wages?

b. Labor is more productive making cotton cloth with a mechanical loom than with a hand loom.

Ken and Traci are two woodworkers who both make tables and chairs. In one month, Ken can make 3 tables or 18 chairs, whereas Traci can make 8 tables or 24 chairs. Given this, we know that the opportunity cost of 1 chair is

c. 1/6 tables for Ken and 1/3 tables for Traci.

Suppose an increase in the price of rubber coincides with an advance in the technology of tire production. As a result of these two events, the demand for tires

c. is unaffected, and the supply of tires could increase, decrease, or stay the same.

Refer to Figure 3-4. Both Alice and Bett

d. face a constant trade-off between producing pitchers of lemonade and pizzas.

Suppose the cost of operating a 75-room hotel for a night is $6,000 and there are five empty rooms for tonight. If the marginal cost of operating one room for one night is $40, the hotel manager should rent one of the empty rooms only if a customer is willing to pay

d. more than $40; because the marginal benefit will exceed the marginal cost.

The business cycle is the

irregular fluctuations in economic activity

Suppose the government taxes the wealthy at a higher rate than it taxes the poor and then develops programs to redistribute the tax revenue from the wealthy to the poor. This redistribution of wealth

is more equal but less efficient for society.