Answer the following statement(s) true (T) or false (F)
1. To an economist, a cost is a forgone opportunity.
2. The most efficient typist is the one who can type the greatest number of words per minute.
3. The most efficient house cleaner is the person who has the lowest cost of cleaning houses.
4. The cost of producing furniture is not the resources used in its production, but the alternative uses for those resources.
5. If only materials and workers are used to make a computer and the materials cost $100 and labor costs $200, then the cost of making the computer is $300.
1. True
2. False
3. True
4. True
5. False
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Labor unions are restrained in their wage demands because
A. most unions deal with employers who have superior bargaining power. B. marginal wage cost curves lie above labor supply curves in most labor markets. C. legislation limits annual increases in nominal wages to 6%. D. the labor demand curve is downward-sloping.
A government budget surplus is
A) a situation in which the supply of goods in the economy is greater than the demand for goods. B) a situation in which the amount spent by the government is greater than the amount collected in taxes. C) the public debt. D) an excess of revenues over government spending.
If an economy consumes 75 percent of any increase in real GDP and spends 10 percent of this increased income on imports, then a decline in government spending by $60 million will result in a total reduction in equilibrium income of:
a. $171.43 million. b. $123.47 million. c. $151.63 million. d. $73.47 million. e. $71.43 million.
At one time, sea lions were depleting the stock of steelhead trout. One idea to scare sea lions away from the Washington coast was to launch fake killer whales, which are predators of sea lions. The cost of making the first whale is $16,000 ($5,000 for materials and $11,000 for the mold). The mold can be reused to make additional whales, and so additional whales cost $5,000 each. Based on these numbers, the production of fake killer whales exhibits:
A. constant returns to scale. B. diminishing marginal product. C. increasing returns to scale. D. decreasing returns to scale.