Which component of AE (AD) makes the greatest contribution to GDP?
(a) Domestic household expenditure (C).
(b) Exports (X).
(c) Investment (I).
(d) The net expenditure of central and local government (G).
Answer: (a) Domestic household expenditure (C).
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The price elasticity of demand would most likely be the lowest for
A) a McDonald's hamburger. B) salt. C) a Toyota sport utility vehicle. D) Shell gasoline.
Total profit = Total revenue ? Total cost (including opportunity cost). Total profit defined in this way is called
a. accounting profit. b. economic profit. c. absolute profit. d. relative profit.
Which of the following statements is not correct?
a. If the signaling theory of education is correct, additional schooling does not affect worker productivity but rather signals a correlation between natural ability and education. b. The theory of efficiency wages suggests that firms pay higher wages to workers in order to induce workers to be more productive. c. Discrimination against workers of a certain race or ethnicity is often in conflict with a firm's desire to maximize profits. d. The theory of compensating wage differentials reflects the different skills, abilities, and productivity of workers.
Since 1994 the number of people on the welfare rolls has
A. risen substantially. B. risen slightly. C. stayed about the same. D. fallen substantially.