Which of the following is the best example of an abstraction that would be used in an economic theory?
a. U.S. companies export thousands of various goods.
b. Throughout the world, there are 42 companies producing cell phones.
c. There are two companies producing tennis rackets.
d. In Illinois, 62,201 people offer legal services.
c. There are two companies producing tennis rackets.
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According to the textbook application, hybrid vehicles
a. were introduced to the mass market by Honda and Toyota b. use an electric motor for start-up and low speeds and a small conventional motor for normal speeds c. generate reduced emissions and provide high fuel efficiency d. all of the above e. none of the above
When outcomes are uncertain
A) people always look for the sure thing. B) people are willing to pay risk premiums. C) people often need to be paid a risk premium before they take a certain course. D) none of these choices.
When expansionary monetary policy pushes real interest rates to an artificial low, the Austrian view of the business cycle predicts this will lead to
a. an increase in aggregate demand and a lengthy expansion in real output. b. a recession, followed by a strong and lengthy expansion in real output. c. malinvestment during an economic boom, followed by a recession. d. malinvestment during a temporary recession, followed by a strong and lengthy economic boom.
What is the marginal product of labor?
a. units of output added by a worker b. average variable cost of one unit of output c. revenue added by adding a worker d. price of output minus cost of input