A) If the average unskilled worker earns $8 per hour in the country and the cost of living is 25% higher in the city, the average unskilled urban worker must earn _____ in location equilibrium.
B) Assume household A and household B produce oranges and apples in an economy with no transaction costs. If household A specializes it can produce 4 oranges or 8 apples, and household B can produce 2 oranges or 2 apples.
What is the opportunity cost in terms of apples of household A to produce one 1 orange?
A. 2 apples
B. 2/3 apples
C. 1 apples
D. 3 apples
C) What is the opportunity cost in terms of oranges of household A to produce 1 apple?
A. 1 orange
B. 1/2 orange
C. 4 oranges
D. 2 oranges
D) When a factory uses indivisible inputs (machines) to allow workers to specialize in a narrowly defined task, leading to higher output per worker and lower average cost, this is an example of?
A. economies of scale
B. constant returns to scale
C. marginal propensity to consume
D. zero economic profit
A) If the average unskilled worker earns $8 per hour in the country and the cost of living is 25% higher in the city, the average unskilled urban worker must earn _____ in location equilibrium.
B) Assume household A and household B produce oranges and apples in an economy with no transaction costs. If household A specializes it can produce 4 oranges or 8 apples, and household B can produce 2 oranges or 2 apples.
What is the opportunity cost in terms of apples of household A to produce one 1 orange?
A. 2 apples
B. 2/3 apples
C. 1 apples
D. 3 apples
C) What is the opportunity cost in terms of oranges of household A to produce 1 apple?
A. 1 orange
B. 1/2 orange
C. 4 oranges
D. 2 oranges
D) When a factory uses indivisible inputs (machines) to allow workers to specialize in a narrowly defined task, leading to higher output per worker and lower average cost, this is an example of?
A. economies of scale
B. constant returns to scale
C. marginal propensity to consume
D. zero economic profit
