In well functioning markets, the degree of product variety reflects which of the following?
A. cost diseconomies from standardization
B. gains from coordination
C. gains from network externalities
D. similar preferences in consumers' tastes
Answer: B
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An explanation for the low saving rate in the United States consistent with the life-cycle reason for saving includes:
A. large and persistent capital gains. B. households spending beyond their means to keep up with community standards. C. relatively generous government assistance for the elderly and large down payments required for home purchases. D. highly-developed financial systems making it easy to buy homes with down payments under 15 percent.
At the equilibrium price, there are
A. Shortages. B. Excess inventories. C. Surpluses. D. No shortages or surpluses.
If the marginal utility of each good is constant as consumption increases, the indifference curves are
A) horizontal. B) vertical. C) straight lines. D) positively sloped.
Refer to the information provided in Table 8.1 below to answer the question(s) that follow.
Table 8.1 
Refer to Table 8.1. In the short run, if the price of labor (L) is $5 per unit, the price of capital (K) is $10 per unit, and firms attempt to minimize costs, then this firm's total cost of producing one unit of output is
A. $100. B. $120. C. $220. D. indeterminate from this information.