Gerald earns a higher salary than his brother Peter because Gerald went to law school and is a lawyer, whereas Peter dropped out of college to work as a mechanic. The difference in salary illustrates a compensating differential
a. True
b. False
Indicate whether the statement is true or false
False
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A consumer is in equilibrium, that is, a consumer is maximizing her utility when marginal utility and price are equal for each of the goods the consumer purchases
Indicate whether the statement is true or false
The long-run result of government intervention in responding to a recession is:
A. the same level of output at higher prices. B. higher level of output at higher prices. C. higher level of output at lower prices. D. lower level of output at the same prices.
Using Figure 2 below, suppose that the economy started at PAE2. A potential change that could cause the economy to go from PAE2 to PAE3 might be:
A. consumption spending increases.
B. investment decreases.
C. imports increase.
D. exports decrease.
Which of the following investments can be classified as specific assets?
a. Opening a restaurant in the business district of a city. b. Purchase of additional cotton bales expecting a rise in demand for cotton garments. c. Leasing out land in a tourist spot to build a retail outlet. d. Purchasing specialized equipment for a hydro-electric power project that will not produce electricity at a different location.