Suppose that Jones builds a new house, then she sells it to Smith, and then Smith sells it to Williams. The total net investment from these transactions is:
A. zero.
B. 1 house.
C. 2 houses.
D. 3 houses.
Ans: B. 1 house.
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Neoclassical economists believe that the government fosters economic growth by providing a stable economic environment with a low rate of ____________ and tax rates that are low and unchanging.
a. importing b. growth c. unemployment d. inflation
According to the Incentive Principle:
A. people tend to do more of something when its benefits are greater. B. benefits are more important than costs in making a decision. C. it is irrational to perform volunteer services. D. people will always take the highest-paying job they are offered.
For this question, assume that there are decreasing returns to capital, decreasing returns to labor, and constant returns to scale. Now suppose that both capital and labor decrease by 5%. Given this information, we know that output (Y) will
A) not change. B) decrease by less than 5%. C) decrease by 5%. D) decrease by more than 5% but less than 10%. E) none of the above
The table above shows Mary's utility from chips and soda. The table shows that Mary has diminishing marginal utility for
A) both chips and soda. B) neither chips nor soda. C) soda, but not chips. D) chips, but not soda.