Category: Economics

Fred has #300 to spend on item x, which are xylophones, and on item z, which are ziths. The price of x is $20 per unit. The price of z is $50 per unit. what is the MRS? for this set of facts

An increase in the demand for hot dogs together with a decrease in the supply of hot dogs occurs. Is there a surplus or a shortage of hot dogs at the original​ price? How does the price​ change?

➤ How does comparative advantage differ from absolute advantage?
Absolute advantage means producing more output with the same inputs or using fewer resources. Comparative advantage means producing with a lower opportunity cost relative to others. A country can have absolute advantage in many goods but should specialize according to comparative advantage to maximize overall gains from trade.

➤ Why does automation reduce demand for routine low-skilled workers?
Automation triggers a substitution effect as firms replace cheaper or more productive machines for routine tasks. Cost-minimizing firms reduce labor input when capital can perform the same work. The decline is larger when tasks are highly substitutable and when the elasticity of substitution between capital and labor is high.

An individual walks to a local sandwich shop and uses a $10 bill to pay for a six dollar sandwich receiving four dollars as changed for this transaction the six dollar price of the sandwich blank

Companies in a free-market are best known to use ______ to help determine how much of their good or service to supply.
Question 1 options:
A) Licensing.
B) Price.
C) Exchange rates.
D) Bartering.