The idea that aggregate price levels do not affect real outcomes in the economy is called the:
A. aggregate price theory.
B. real output theory.
C. neutrality of money.
D. neutrality of prices.
Answer: C
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If a firm's marginal revenue from its 100th unit of output is $50 and the marginal cost from its 100th unit of output is $45, then in the short run this firm should:
a. increase its plant size. b. change its technology. c. produce more than 99 units of output. d. produce less than 100 units of output. e. shut down.
Generally, specialization leads to
A) constant opportunity costs. B) greater productivity. C) reductions in people's skill levels. D) greater self-reliance.
Seat belts are not cost-effective highway safety devices because so many of them must be installed and go unused that there cost is high
Indicate whether the statement is true or false
Which of the following goods is NOT subject to the free-rider problem?
A) national defense B) the local police force C) public fireworks D) a public transit system