The total cost to the U.S. of a terrorist attack occurring on its soil is
A. fully and clearly recorded in the speeches of Osama bin Laden broadcast on Al Jazeera.
B. best measured by the insurance claims, since those are the costs that must be explicitly paid in dollars.
C. poorly measured by economic or opportunity costs since these are usually vague and subjective.
D. fully measured only by economic or opportunity costs, the highest valued opportunities foregone.
Answer: D
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It is inefficient to charge a positive price for a collective consumption good
a. True b. False
What is the relationship between marginal cost and marginal product?
a. The two are not related. b. When marginal product increases, marginal cost increases. c. When marginal product increases, marginal cost falls. d. When marginal product is negative, marginal costs are negative. e. When diminishing marginal returns set in, marginal costs fall.
Households in America tend to consume more and more as they grow older
a. True b. False Indicate whether the statement is true or false
A recent study found that an increase in the federal tax on beer (and thus an increase in the price of beer) would reduce the demand for marijuana. We can conclude that:
A. beer and marijuana are substitute goods. B. beer and marijuana are complementary goods. C. beer is an inferior good. D. marijuana is an inferior good.