Which of the following is an example of a positive economic statement?
a. The minimum wage should be raised to help low-income workers
b. The size of the Federal government should be reduced
c. Education and income are highly correlated
d. Nigeria should be given more foreign aid to foster economic development
Answer: c. Education and income are highly correlated
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Refer to the table below. The perfectly competitive firm has a random demand with a 25 percent chance of being $5 and a 75 percent chance of being $9. What quantity should the firm produce to maximize its expected profit?
The above table summarizes the marginal cost of production at various quantity levels for a perfectly competitive firm.
A) 110
B) 100
C) 130
D) 120
Patents have been defended by some on the grounds that they stimulate inventive activity. Others have argued for changes in current patent laws because:
a. resources are misallocated by the grant of a patent monopoly b. patents may not be necessary to encourage inventive activity c. the current patent monopoly period (17 years) is too short to encourage any inventive activity. d. a and b only e. all of the above
You just won the lottery. You have a choice of three different prize options. Option #1: receive $1,200 immediately Option #2: receive $1,500 a year from now Option #3: receive $5,000 five years from now. If the interest rate is 10% the ranking of the options, from the lowest present value to the highest is
a. Option #2, Option #3, Option #1 b. Option #3, Option #1, Option #2 c. Option #1, Option #2, Option # d. Option #1, Option #3, Option #2 e. Option #3, Option #2, Option #1
During the Great Depression in the early 1930s,
a. bank runs closed many banks. b. the money supply rose sharply. c. the Fed decreased reserve requirements. d. both a and b are correct.