An explicit cost is
A) a nonmonetary opportunity cost.
B) a cost specifically related to government rules and regulations.
C) a cost that involves spending money.
D) a cost unique to corporations.
Answer: C
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If you win money in a casino you may be more likely to spend that money than your hard-earned cash. This is called:
a. compartmentalizing b. self control c. rule of thumb d. anchoring
Suppose you were working for Richstone's bakery and calculating whether the bakery was making a profit, considering the recent increase in rent. You have the following data: P = $20, AVC = $10, AFC = $8 and quantity of birthday cakes produced a day is 20
a. loss of $10 b. profit of $10 c. profit of $20 d. profit of $40 e. loss of $40
Keynesian economists argue that the automatic adjustment of wages and prices in the macro economy is quite rapid
a. True b. False Indicate whether the statement is true or false
If Ana devotes all her time to making fudge, she can make 3 pounds of fudge an hour, and if she devotes all her time to making toffee, she can make 2 pounds of toffee an hour. If Leo devotes all his time to making fudge, he can make 4 pounds of fudge an hour, and if he devotes all his time to making toffee, he can make 5 pounds of toffee an hour. According to The Principle of Comparative Advantage, Ana and Leo will be able to produce more overall if:
A. the Principle of Comparative Advantage does not hold in this example. B. both Leo and Ana specialize in fudge. C. Ana specializes in fudge and Leo specializes in toffee. D. Leo specializes in fudge and Ana specializes in toffee.