Suppose 30 employee-hours can produce 50 units of output. Assuming the law of diminishing marginal returns is present, to produce 100 units of output would require:
A. an additional 30 employee-hours.
B. more than 30 additional employee-hours.
C. fewer than 30 additional employee-hours.
D. a total of 60 or fewer employee-hours.
Answer: B
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Suppose your instructor gave hats with your school's logo to half of your economics classmates. She then asked these students to value the hats, and the average response was $9 per hat
Under the endowment effect, we should expect that the average value assigned by the economics students who did NOT receive the hats to be: A) higher. B) lower. C) the same. D) We cannot answer this question without knowing more about the risk preferences of the students.
The investment rate is the percentage of total output allocated to
A. The production of new plants, equipment, and structures. B. Education and training for the workforce. C. Consumer retirement accounts. D. Saving.
Classical economists suggest that unemployment is a short-lived phenomenon because
A. wages adjust quickly to equilibrate quantity of labor demanded with quantity of labor supplied. B. wages remain unchanged when the quantity of labor supplied exceeds the quantity of labor demanded. C. wages remain unchanged when the quantity of labor demanded exceeds the quantity of labor supplied. D. wages tend to rise slowly when the quantity of labor demanded equals the quantity of labor supplied.
Quotas, such as limiting the amount of residential water use during a drought, restricts an individual's preference set and
A) reduces utility because an individual cannot consume as much as they would without the quota. B) increases utility because quotas restrict output and raise profits for the water company. C) reduces utility because an individual is forced to substitute to other goods. D) does not affect overall utility.