If the cross price elasticity of demand between two commodities is positive, then these commodities are
A. are complements.
B. are substitutes.
C. are inferior.
D. are superior.
Answer: B
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Which of the following is an example of a positive externality (additional social benefit)?
A. an increase in the value of land you own when a nearby development is completed B. falling property values in a neighborhood where a disreputable nightclub is operating C. the costs paid by a company to build an automated factory D. the higher price you pay when you buy a heavily advertised product
Hotspur Incorporated, a manufacturer of microwaves, is a price taker in both the input and output markets. To maximize its profit, Hotspur will hire labor up to the point where
A) the marginal revenue product of labor equals the wage rate. B) the marginal revenue product of labor equals the output price. C) the marginal product of labor is no longer positive. D) all economies of scale have been exhausted.
Economics:
a. is a narrowly focused discipline.
b. is a broad-ranging discipline.
c. concerns itself only with the U.S. economy.
d. says little about "everyday life."
e. deals with minor problems.
Real GDP per capita:
A. cannot grow more rapidly than real GDP. B. cannot grow more slowly than real GDP. C. necessarily grows more rapidly than real GDP. D. can grow either more slowly or more rapidly than real GDP.