Well-defined and actively-enforced private property rights are necessary to the efficient operation of markets work because they prove that a person
a. owns what he or she is selling
b. has the right to buy
c. will make a profit
d. will satisfy his or her wants
Answer: a. owns what he or she is selling
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According to this Application, which of the following is a reason for holding cash?
A) for convenience B) fear of financial catastrophe C) to make a purchase when you cannot use a debit or credit card D) all of the above
Which of the following are two components of the opportunity cost of using capital already owned by the firm?
A) economic profit and normal profit B) implicit rental rate and economic profit C) explicit rental rate and economic costs D) economic depreciation and forgone interest
Which of the following is an example of a measure of labor productivity?
A) Farm workers produce 30 bushels of wheat per worker per day. B) Autos get 30 gallons to the mile. C) The growth rate of per capita real GDP is 3.5 percent per year. D) Wages increase by 3.5 percent per year for 5 years.
Behavioral economists recommend mechanisms that help people:
A. find the lowest cost for items that maximize their utility. B. stick with choices they say they want to make, but often don't. C. enact utility-maximizing decisions based on complete information. D. Behavioral economists have not developed tools that help people with any of these.