A labor-intensive production process is one that
A. Has a low ratio of capital to labor.
B. Has a low ratio of labor to capital.
C. Is used only in the United States.
D. All of the choices are correct.
Answer: A
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The terms of trade refer to:
A) rules and regulations that govern trade between nations. B) product of the opportunity cost of producing the same good in two trading nations. C) exchange rate of goods for goods. D) amount of money that has to be given up to import an additional quantity of a good.
The minimum efficient level of production refers to the production level in the long run that spreads setup costs out just enough to make production profitable.
Answer the following statement true (T) or false (F)
The national debt
A) is the sum of all past federal deficits plus any surpluses. B) grows when the government runs a deficit. C) grows when government spending increases. D) is a major problem facing the U.S. government.
Suppose there are no borrowing constraints but the individual wishes to leave a bequest of $120,000 (after adjusting for inflation) to heirs. Then annual consumption should be
Consider an individual who enters adulthood and the labor force at age 18, expects to work 5 years at a real income of $10,000 per year, anticipates earning a real income of $40,000 per year from age 23 to 63, expects to retire with a $10,000 annual pension, and live until age 78. Suppose the interest rate is zero, and the individual seeks perfectly smooth consumption across his adult lifetime. a) $12,000 b) $16,000 c) $20,000 d) $24,000 e) $28,000