The rate at which someone can swap money for a good is called the _____ of the good.
A. price
B. opportunity cost
C. total cost
D. rate of substitution
A. price
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John's utility of wealth curve is shown in the above figure. He currently has total wealth of $20,000. If there is a 50 percent chance that his $10,000 car will be stolen, what is the value of insurance against the theft?
A) $0 B) $5,000 C) $7,000 D) $13,000
If consumption = $5,000; investment = $800, government purchases = $700, exports = $30, imports = $60, and transfer payments = $340, then _____
a. GDP = $7,400 b. GDP = $7,740 c. GDP = $3,140 d. GDP = $6,470 e. GDP = $6,840
"If China and India continue their economic expansion, the world cannot provide enough raw materials without terrible shortages worldwide." Evaluate this statement
a. True, increased demand from developing countries will swamp the existing supply of resources. b. True, increased demand from China and India will lead to large shortages in the North America and Europe. c. False, the shortage will be limited to China and India. d. False, increasing scarcity will result in higher prices and the deployment of new technologies that increase the efficiency of production, and together these markets forces will help to balance demand and supply worldwide.
By comparing the marginal revenue and marginal cost from each unit produced, a firm in a competitive market can determine the profit-maximizing level of production
a. True b. False Indicate whether the statement is true or false