The LDCs don't invest in capital goods, thereby reducing output potential, increasing poverty, and making future costs of capital investment even higher. This tendency has been referred to as the
a. circular flow
b. vicious cycle of poverty
c. investment cycle
d. business cycle
e. economic dualism
B
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Assume that an employer discovers that the marginal revenue product of the last two workers that he has hired is less than the wage rate that he is paying them
He is operating in a purely competitive market in both the output that he sells and the labor that he hires. What would you advise this employer to do and why?
The Farm Factory, a booth at the local Farmer's Market, sells fresh eggs for $1.50 per dozen and fresh milk for $2.50 per gallon. What is the opportunity cost of buying a dozen eggs?
A) $1.50 B) $2.50 C) 1 2/3 gallons of milk D) 3/5 of a gallon of milk
According to the life-cycle hypothesis, if a person wants consumption to be constant over her lifetime, she will smooth consumption by initially ________ over her lifetime
A) saving, then dissaving, then borrowing B) borrowing, then saving, then dissaving C) dissaving, then borrowing, then saving D) saving; then borrowing; then dissaving
What is one way firms can enforce tie-in sales?
A) One of the goods has no close substitutes. B) contractual arrangements C) information asymmetry D) Any of the above.