A bowed Production Possibilities Curve (PPC) indicates
A. only 1 good is always being produced.
B. changing technology.
C. that the trade-off between the 2 goods is not constant.
D. inefficient production.
Answer: C
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In the simple trade model, what is assumed about labor?
What will be an ideal response?
The internal rate of return of a project can be found by
A) discounting all cash flows at the cost of capital. B) averaging all cash inflows, and calculating the interest rate, which will make them equal to the average investment. C) calculating the interest rate, which will equate the present value of all cash inflows to the present value of all cash outflows. D) None of the above
Insurance works because it:
A. reallocates the costs of unforeseen events, sparing any individual from taking the full hit. B. makes it less likely that their clients will experience unforeseen events. C. prevents any one individual from experiencing all the unforeseen events. D. None of these statements is true.
Rational ignorance suggests that voters may not spend much time examining candidates before an election because
a. politics is boring b. each voter has virtually no chance of deciding the election c. public choices are not important to society d. candidates are chosen by the electoral college e. candidates are usually so different that it is easy to determine which is better