Rational choice requires that opportunity cost be
A. ignored in making a decision.
B. considered for individual choices but not for societal choices.
C. computed but not actually used in making a decision.
D. considered as part of making a decision.
E. used as the sole decision criterion.
Answer: D
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Which of the following explains why supply is more elastic as more time passes?
A) It is difficult or impossible to increase the quantity produced in a short period of time. B) Consumers have more time to search for substitutes. C) Sellers try to take advantage of a high price in the short term. D) The supply curve becomes generally steeper as more time passes. E) There is no explanation for this phenomenon.
Refer to Figure 3-2. An increase in price of inputs would be represented by a movement from
A) A to B. B) B to A. C) S1 to S2. D) S2 to S1.
Economists measure the price level
A. by keeping track of nominal GDP. B. using a price index. C. by measuring the growth rate in money supply. D. by measuring the growth rate in real GDP.
Characteristics of the "invisible hand" concept include all of the following, except
A. Simple markets. B. Individuals and firms pursue their own self-interest without any central direction or regulation. C. A complete lack of government involvement in the economy. D. All of the choices are characteristics of the "invisible-hand."