Some people have argued that the government should provide free medical care to everyone. Under this system:
A. the price of medical care will ration resources efficiently.
B. prices will not ration medical care so there will be no scarcity.
C. the price of medical care will allocate resources efficiently.
D. prices will not ration medical care so some other rationing method will be used.
Answer: D
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Waiting in line for a free ticket involves no opportunity cost.
Answer the following statement true (T) or false (F)
The difference between Gross National Product and Net National Product is the
A. rate of inflation. B. statistical discrepancy encountered in calculating GDP. C. difference between real versus nominal GDP. D. depreciation of the economy’s capital stock.
Refer to the above table. What is the absolute price elasticity of demand if a price falls from $7.50 to $7?
A) 10 B) 1.38 C) 0.724 D) 0.1
Suppose Bob leaves his $50,000-a-year job as a financial advisor to P.E.T.S. and starts his own business selling spot remover for Dalmatians. In the first year his accounting profit is $70,000 . Based on this level of success, Bob should
a. return to his old job because his economic profit is negative b. return to his old job because his economic profit is smaller than his accounting profit c. return to his old job because his economic profit is less than his old salary d. stay with his new firm because his economic profit is positive e. stay with his new firm because accounting profit is positive