Janie must choose to either mow the lawn or wash clothes. If she mows the lawn, she will earn $30, and if she washes clothes, she will earn $45. She dislikes both tasks equally and they both take the same amount of time. Janie will therefore choose to ________ because it generates a ________ economic surplus.
A. wash clothes; bigger
B. mow the lawn; bigger
C. wash clothes; smaller
D. mow the law; smaller
Answer: A
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Explain how indirect crowding out can offset expansionary fiscal policy
What will be an ideal response?
Based on the table showing global income inequalities, where are the most equal countries located?
a. southern Europe
b. northern Europe
c. North America
d. southern Africa
According to Keynes, why might deflation create problems for an economy?
A. People would drop out of unions because unions would become ineffective at keeping wages of members high. B. Consumers might expect prices to fall further and cut back consumption now. C. In expectation of increased spending, too many entrepreneurs would begin businesses and most would fail. D. Producers might increase production to take advantage of falling input prices.
A monopolist is producing at an output level at which ATC = $55 P = $65, MC = $45, and MR = $35. We can conclude that
A. economic profit cannot be increased. B. economic profit could be increased by producing less. C. economic profit could be increased by producing more. D. the firm is earning $10 in economic profits.