Which of the following is one source of disagreement between economists?
A. Some facts about the economy are unknown.
B. Economists differ in their political persuasions.
C. Economic theory may not always give an unambiguous answer to a question.
D. Solving one problem may make another problem worse.
E. All of these responses are correct.
Answer: E
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One baseline assumption that economists make about consumer behavior is that:
A. people are rational utility maximizers. B. people will always choose short-term benefits to longer-term payoffs. C. people will always choose what makes them happiest. D. people are unpredictable.
Which of the following is false?
a. Once a country has a comparative advantage in producing a good, that comparative advantage will always continue. b. If you can mow the lawn at home faster than your younger brother, you have a comparative advantage over him in mowing the lawn. c. Restrictions on trade will reduce people's degree of specialization according to comparative advantage d. As practice at producing what you have a comparative advantage in makes you better at it, your comparative advantage would tend to increase.
In a free market, a given unit of an input will be used by the firm that
A. earns the largest addition to total profit from the use of that unit of input. B. has the lowest marginal cost of producing another unit of output. C. sells its output for the highest price. D. earns the largest total profit.
The interest rate at which commercial banks lend to their customers with the best collateral is known as
a. prime rate. b. federal funds rate. c. discount rate. d. T-bill rate.