In a value added production function like the one used in the text, raw materials are
A. called intermediate goods.
B. called final goods.
C. are counted in the final product of any production process as part of the value of output.
D. counted as inputs in a production process.
Answer: A
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If the production possibilities frontier for guns and butter is bowed outward from the origin, this indicates constant opportunity cost between the two goods.
Answer the following statement true (T) or false (F)
Because the monopolistically competitive firm faces a ________ demand curve for its product, it ________ the price of its output
A) downward-sloping; can influence B) horizontal; can influence C) horizontal; cannot influence D) downward-sloping; cannot influence
The unemployment rate may:
A. understate the effect of a recession on employment because some leave the labor force. B. overstate the effect of a recession on employment because some leave the labor force. C. understate the effect of a recession on employment because many enter the labor force. D. overstate the effect of a recession on employment because many enter the labor force.
Bonnie gets her hair cut at her usual salon and is very happy with the results. Later that afternoon, she goes to the mall and sees that a hair salon is giving away free haircuts only on that day. If Bonnie does not take advantage of the giveaway, it is because the:
A. marginal utility of the next haircut would be zero or negative. B. marginal utility of the next haircut would increase. C. marginal utility of the next haircut would be zero or positive. D. total utility of both haircuts would be zero or negative.