The cost of making an economic exchange is called a(n) ________ cost
A) sunk
B) transaction
C) social
D) accounting
B
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The per worker production function shows the relationship between
A) the labor force and the capital stock. B) the supply of labor and the population. C) the hours worked and the number of workers. D) real GDP per worker and capital per worker.
Suppose that an economy is producing on its production possibilities curve but is not producing quantities of each good where the marginal benefit equals the marginal cost for each good. This economy:
A. should not change its production because it cannot improve its allocation by shifting resources. B. can improve its allocation by lowering the unemployment rate. C. can improve its allocation by producing more of one good and less of the other. D. can improve its allocation by producing more of both goods.
Most people would prefer to drive a luxury car that has all the options, but more people buy less expensive cars even though they could afford the luxury car because
A) car buyers are irrational. B) the total utility of less expensive cars is greater than that of luxury cars. C) the marginal utility per dollar spent on the less expensive car is higher than that spent on luxury cars. D) luxury cars cost a lot more than non-luxury cars.
If the balance of the current account in the United States is -$900 billion, which of the following is most likely to be true?
A) The balance on the financial account is positive. B) Net foreign investment is positive. C) The trade balance is positive. D) The balance on the capital account is negative.