How are money cost and opportunity cost related to each other?
A. If markets function well, they are closely related.
B. They are always identical in any economic system.
C. Opportunity cost must always exceed money cost.
D. Money cost is greater than or equal to opportunity cost.
E. In a market economy, they must be equal to each other.
Answer: A
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Compare and contrast the marginal and average tax rates
What will be an ideal response?
If an economy is experiencing deflation, a decrease in the price level, then the most advantageous actions would be
a. borrowing money at a fixed interest rate and buying a house. b. borrowing money at a fixed interest rate and buying land. c. keeping money in a checking account. d. keeping your wealth in gold and other precious metals.
Let Edt = -0.5. This implies that the demand for t is
A. inelastic, because if Pt decreases by $1, Qdt will increase by 0.5 units. B. inelastic, because if Pt decreases by 1 percent, Qdt will increase by 0.5 percent. C. elastic, because if Pt decreases by 1 percent, Qdt will decrease by 0.5 percent. D. elastic, because if Pt increases by 1 percent, Qdt will decrease by 0.5 percent.
Evaluate the statement that “for a private open economy the equilibrium GDP always corresponds with an equality of exports and imports.”
What will be an ideal response?