Compare a football quarterback’s daily and yearly completed pass percentage to a business’s marginal and average product.
What will be an ideal response?
ANS:
Just as a quarterback’s daily (marginal) average affects his yearly average, so too does the marginal product of a firm affect its average product. If at midseason, for example, a quarterback is completing 30 percent of his passes and for the day he goes 10 for 20 (that is, he completes 50 percent), his yearly average will rise slightly. If he goes 5 for 25 (25 percent) for the day, his yearly average will fall slightly.
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Convergence of the income gap has been most dramatic between
A) Hong Kong and the United States. B) the Central European countries and the United States. C) Africa and the United States. D) South America and the United States.
During the expansion phase of the business cycle, business firms become optimistic about their future earning capacity as do banks. Nominal interest rates rise during expansions. Investment lending could be expected to
A) rise if the change in future earnings is thought to be greater than the change in interest rates. B) stay the same. C) fall. D) fall if the change in future earnings is thought to be greater than the change in interest rates.
Refer to the above table. Suppose the demand for smartphones rises because more people use the Internet with a smartphone. The new equilibrium price will be
A) $200. B) $275. C) more than $275. D) impossible to be determined given the information.
If a college enforces a new policy where anyone caught cheating is immediately expelled, the basic postulate of economics suggests that
A) the amount of cheating will be unaffected. B) any of the above is possible because student behavior is unpredictable. C) fewer students will attempt to cheat. D) cheating will be completely eliminated.