Referring to Situation #1 suppose that you decide that you have to fire the first and the third executive without hiring any replacements
What would be the opportunity cost of the second executive's work? Explain why your answer is not the same as in the question above.
The opportunity cost of second executive's work is $800,000 . The reason is that since each executive can perform any work that they other can then it makes sense to change the second executive's job so that he is now doing the most highly valued work – that with the $1,000,000 value. That leaves the $800,000 job undone which means that becomes the opportunity cost of the second executive's work.
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If the supply of labor in a purely competitive labor market increases, then the product
A. demand curve will shift to the left. B. supply curve will shift to the left. C. supply curve will shift to the right. D. demand curve will shift to the right.
Is increased capital spending the only way for an economy to expand its production possibilities frontier?
a. No, an economy can also expand by invention and innovation. b. No, an economy can also grow by investment instead of capital spending. c. Yes, more capital is the only way to expand its production possibilities frontier. d. Yes, although more capital clearly has a high opportunity cost. e. Yes, because capital is the only constraining resource that limits growth.
In the above table, if the market is perfectly competitive and unregulated, the equilibrium output will be
A) 1,000 units. B) 2,000 units. C) 3,000 units. D) 4,000 units.
New residential housing is counted in GDP as a(n):
a. durable consumption good. b. household durable good. c. investment good. d. inventory expansion. e. long-term durable good.