Most economists believe that classical theory describes the world
a. in the short run.
b. in the long run.
c. in both the short run and the long run.
d. in neither the short run nor the long run.
b
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What do economists mean by the phrase "sunk costs are sunk"?
a. Sunk costs are irretrievable, but they do lower profits and thus affect the firm's output level. b. Sunk costs are a primary reason why marginal costs tend to increase. c. Sunk costs cannot be recovered and are irrelevant to future decision making. d. Sunk costs lower consumer welfare, because producers "pass on" these costs in the form of higher prices.
The use of money as a unit of account:
a. discourages specialization and division of labor. b. inhibits the exchange of goods and services. c. makes it difficult to compare the relative values of goods and services. d. lowers information costs relative to barter. e. relies on the existence of a double coincidence of wants.
Historically speaking, a one-dollar decrease in household wealth will cause consumer spending to fall by:
A. $0.30 to $0.70. B. $3.00 to $7.00. C. $0.03 to $0.07. D. $30.00 to $70.00.
Refer to the information provided in Figure 6.11 below to answer the question that follows.
Figure 6.11Refer to Figure 6.11. The opportunity cost for a day's worth of income is ________ of leisure.
A. 1 hour B. 10 hours C. 24 hours D. indeterminate from this information.