Answer the following statement true (T) or false (F)
1) Although sleeping in on a work day or school day has an opportunity cost, sleeping late on the
weekend does not.
2) An economy will always operate at some point on its production possibilities curve.
3) In drawing a particular budget line, money income and the prices of the two products are
fixed.
4) The lower the consumer's income, the higher his or her budget line.
1) F
2) F
3) T
4) F
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If a firm's average total cost is less than price where MR = MC
A) the firm should shut down. B) the firm should cut back on its output to lower its cost. C) the firm should continue to produce the output it is producing. D) the firm should raise its price.
According to Classical economists, investment is __________ related to the __________
A) directly; interest rate B) directly; level of GDP C) inversely; interest rate D) inversely; level of GDP
Special interest groups are subsets of the general population that
A) attempt to influence government officials for the benefit of the general population. B) choose to be rationally ignorant because they are interested only in things that the government is not concerned with. C) are on the fringes of the political spectrum. D) a and c E) none of the above
Payments for loans by households to firms are known in aggregate accounting as:
A. employee compensation. B. rents. C. profits. D. interest.