Which of the following is not an example of rent seeking?
A. A firm uses resources to convince a legislature to direct subsidies toward the firm.
B. A mastermind hires a crew to tunnel into a bank vault.
C. A person listens to an outdoor concert without paying.
D. A window salesman throws bricks through perfectly fine windows.
Answer: C
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In the short run, the relevant costs for a firm to consider whether to shut down production are:
A. average total costs. B. average variable costs. C. average fixed costs. D. fixed costs.
One way the consumer price index (CPI) differs from the GDP chain price index is that it:
a. includes only purchases of items bought by typical urban consumers. b. uses only current year quantities. c. is based on all final goods and services. d. includes only services.
It is often observed that, over the same period of time and for the same good, marginal utility declines rapidly for some consumers and very little for others. This observation illustrates:
a. that economic theory is of little value in explaining consumer behavior. b. that consumers are not identical. c. tastes and preferences should not be included in any discussion of consumer choice. d. tastes and preferences among consumers are quite similar. e. that if consumers weren't identical, economic theory would not be able to provide insight into consumer behavior.
Why should an economy specialize and trade according to its marginal cost advantage or comparative advantage?