What is the most appropriate test to evaluate whether a government-spending program will improve living standards and lead to higher income levels?
What will be an ideal response?
The value of the output generated by the government-spending program compared to its opportunity cost
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Atlas Corporation is in sound financial condition. It sells a long-term bond. Which of the following make the interest rate on this bond lower than otherwise?
a. Both Altas' sound finances and the long term of the bond. b. Atlas' sound finances but not the long term of the bond. c. The long term of the bond but not Atlas' sound finances. d. Neither Atlas' sound finances nor the long term of the bond.
Alex, who is risk-neutral, is looking for a one-bedroom apartment to rent for the month of August while he's on vacation in Seattle. All of the one-bedroom apartments in the neighborhood where he wants to stay are of equal quality, but 70 percent rent for $700 per month, 20 percent rent for $600 per month, and 10 percent rent for $500 per month. The first apartment Alex finds rents for $700 per month. If the cost to Alex of searching for an apartment is $30, then searching for another apartment is a gamble with an expected value of:
A. $20. B. $40. C. $0. D. $10.
Why do most people choose to specialize in a narrow set of skills for their work, rather than to learn a little bit about several varied fields of endeavor?
A. They are unaware of how much better off they would be if they diversified their skills. B. They feel that doing so will minimize their chances of being unemployed. C. They don't correctly perceive the costs of being so specialized. D. It allows them to earn more income by being more productive.
People use water for trivial, unimportant purposes because
A) there is little demand for water. B) its relative price is very low. C) they don't realize how essential water is to life. D) they don't realize the world's supply of water is limited. E) they underestimate the total demand for water.