While studying with your friend, your friend states, "Our leisure time increases GDP but lowers our standard of living because it reduces the amount of goods and services we can consume." Is your friend's statement correct?
What will be an ideal response?
Your friend's assertion is incorrect on two counts. First, leisure time does not increase GDP. Indeed, by taking time away from production, leisure time decreases GDP. Second, leisure time increases our standard of living. People enjoy their leisure time and therefore having more leisure time raises their standard of living.
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In a competitive market for a private good with no price or quantity regulations, no external cost nor external benefit, low transactions costs, and no taxes or subsidies,
A) the allocation of resources is planned by the government. B) production is organized by government organizations. C) efficiency can be attained in the market with no government intervention. D) efficiency is usually be achieved by majority rule. E) efficiency is generally obtained by using a command system.
In a typical year, new small firms create ________ jobs
A) 250,000 B) 1.1 million C) 1.8 million D) 3.3 million
The level of investment necessary to keep the capital-labor ratio constant is called
A) capital investment. B) break-even investment. C) depreciated investment. D) diluted investment.
Diversification of a portfolio leads to:
a. a negative correlation between the investments. b. a lower mean of returns. c. a lower variance of returns. d. a higher standard deviation of returns.