An automobile manufacturer imported equipment in order to produce a particular model at low cost. Falling demand, however, forced it to cease producing that model, and the company took a large loss because the equipment was not usable for producing other models. The equipment was characterized by:
a. locational specificity.
b. dedicated specificity.
c. human specificity.
d. task specificity.
D
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When Homer has 5 doughnuts, his marginal value is 15¢ per doughnut. We can conclude that Homer
a. places a value of 3¢ on each doughnut he owns. b. needs to purchase more than 5 doughnuts to reach his optimum. c. receives 75¢ worth of total satisfaction from his 5 doughnuts. d. would refuse to pay more than 15¢ for a sixth doughnut.
Which of the following is not an example of a derived demand?
A) Several of the animated films released between 1999 and 2001 failed to earn a profit, which caused some companies to stop making these films, thereby decreasing the demand for animators. B) As advancements in medical technology increase the safety and success of laser eye surgery, the demand for opticians has decreased. C) Millicent Manning, the owner of a furniture store, is concerned that her sales have fallen for the past six months. She attributes this to the downturn in the real estate market. D) Seth Bullock, a personal-injury attorney, complains that he is earning far less now than a few years ago largely because personal injury cases have been undercut by state laws limiting class-action suits and payouts on damages.
The term used to describe a more realistic conception of human problem-solving that assumes less than perfect analysis is: a. framing
b. compartmentalizing. c. countercyclical policy. d. bounded rationality.
A rightward shift of the production possibilities frontier of an economy represents: (check all that apply)
a. an increase in the average price level in the economy. b. economic growth. c. an increase in the quantity of resources. d. an increase in the overall demand for goods and services in the economy.