According to the principle of diminishing returns, an additional worker decreases total output
Indicate whether the statement is true or false
FALSE
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How is the efficient quantity of public goods determined?
What will be an ideal response?
If Sam, a farmer in 1963, finds that he needs two bushels of corn to buy what his grandfather bought with one bushel during the 1910–1914 benchmark period, then
a. Sam is twice as well off in 1963 than his grandfather was b. farm productivity has declined by half over this period c. the equilibrium price of corn has obviously doubled d. a price floor that doubles the 1963 market price creates full parity in 1963 e. Sam will have to leave the farm
Which of the following is generally NOT an example of a zero price?
A. Getting a refill of coffee at a restaurant B. Downloading another MP3 from iTunes C. Watching another movie on Netflix D. Sending another text message
At the end of 2008, the federal funds rate in the United States was close to zero. Which of the following is a major concern associated with such a low rate?
A) That traditional monetary policy will have no impact on the economy. B) Such a low rate spurs excessive consumption and investment spending which may lead to inflation. C) Such a low rate spurs excessive consumption and investment spending which may lead to deflation. D) Economic agents might be unwilling to borrow in anticipation of even lower interest rates.