If economists are making the assumption that business people try to maximize profits, the best way to determine whether this assumption is useful or not is to
A) see whether it generates accurate predictions about the choices of business people.
B) ask business people whether it is true or not.
C) find out whether U.S. businesses are more profitable than European businesses.
D) take a survey of people and see if they agree with this assumption.
Answer: A
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Private markets can allocate resources optimally
a. under all circumstances b. only if property rights are well defined and can be easily enforced c. whenever property rights are well defined, regardless of whether they can be easily enforced d. whenever property rights can be easily enforced, regardless of whether they are well defined e. whenever there is no government intervention in the market
Your neighbor has knowledge of economics and you would like her to share it with you. You own a car, a CD player and a new pair of running shoes. You wish to make a trade, but the neighbor does not want what you have. The problem can be stated as follows: You are not satisfying the
A) rule of transaction costs. B) double coincidence of wants. C) law of marketability. D) terms of a common denominator.
If workers received a 5 percent wage increase and the rate of inflation was 3 percent, then their real wage:
A. remained constant. B. equaled the nominal wage. C. decreased. D. increased.
Wayne's Jacket Shop sells Wayne's jackets for $20 each. Wayne finds that his total revenues change according to the number of workers he hires, as shown in the table below.WorkersTotal Revenue1$1,00021,40032,00041,6005800What is the marginal revenue product of the third worker?
A. $667 B. $6,000 C. $400 D. $600