Question

If firms increase the hourly wage paid to all workers then (all else the same) this will tend to:

Group of answer choices

increase the price of the goods sold by the firms because of a decrease in supply.

increase the price of the goods sold by the firms because of an increase in supply.

decrease the price of the goods sold by the firms because of a decrease in supply.

decrease the price of the goods sold by the firms because of a increase in supply.

John has 5 hours per day to allocate to work and wants to earn as much income per day as possible. He can work for a landscaper and earn $10 per hour or he can work for a farmer picking lemons. The table below shows how many baskets of lemons John can pick depending on how many hours he devotes to the activity per day.

Hours	1	2	3	4	5
Total Lemons	15	27	38	44	48

Assume that John can earn $1 for each basket of lemons. How should John divide his 5 hours of work per day?

Group of answer choices

3 hours on the lemons and 2 with the landscaper

2 hours on the lemons and 3 with the landscaper

all 5 hours on the lemons

4 hours on the lemons and 1 with the landscaper

If a country has a comparative advantage in producing fish, then they must also have an absolute advantage in producing fish.

Group of answer choices

True

False

Answer 1

If firms increase the hourly wage paid to all workers then (all else the same) this will tend to:

Answer: increase the price of the goods sold by the firms because of a decrease in supply

A change in the cost of an input will impact the cost of producing a good and will result in a shift in supply; supply will shift outward if costs decrease and will shift inward if they increase.

...

Answer: 3 hours on the lemons and 2 with the landscaper

Landscaper pays $10 per hour,

For the 3rd hour he picks up 11 more baskets of lemon (38-27) earning him $11 more than $10 from landscaper.

For the 4th hour he picks up 6 more baskets of lemon (44-38) earning him $6 less than $10 from landscaper.

..

If a country has a comparative advantage in producing fish, then they must also have an absolute advantage in producing fish.

Answer: False

Comparative advantage does not require absolute advantage and also does not imply absolute advantage. Absolute advantage refers to producing a good with a smaller quantity of inputs, whereas comparative advantage refers to the ability to produce a particular good at a lower opportunity cost than the other party