Sunk costs:
A. can be ignored because they have no effect on marginal costs.
B. should be taken into consideration when choosing the best level of an activity.
C. should not be ignored because they lead to higher marginal costs.
D. can be ignored because they don't have to be paid by the decision maker.
A. can be ignored because they have no effect on marginal costs.
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Assume that a combination of 10 bottles of wine and 2 cartons of milk lies on a consumer's budget constraint. If the price of one bottle of wine is $10, and one carton of milk is $1, what is the consumer's income?
A) $100 B) $20 C) $120 D) $102
Short-run equilibrium exists
A) where the AD curve intersects the short-run aggregate supply (SRAS) curve. B) where the AD curve intersects the long-run aggregate supply (LRAS) curve. C) on the AD curve only. D) on the SRAS curve only.
As a result of pure free trade in a commodity, the
A. price of the commodity must be the same in all countries. B. total quantity imported will exceed the total quantity exported. C. price of the commodity will be higher in the producing country. D. price of the commodity will be lower in the producing country.
In preparing their estimates of the stimulus package's effect on GDP, Obama administration economists estimated a government purchases multiplier of 1.57. Economist Robert Barro argues that during wartime, the military expenditures multiplier would be
________ the administration's estimate of the government purchases multiplier, and economists Lawrence Christiano, Martin Eichenbaum, and Sergio Rebelo argued that when short-term interest rates are zero, the government purchases multiplier would be ________ the administration's estimate. A) higher than; lower than B) lower than; higher than C) higher than; equal to D) equal to; lower than