The economic resource that organizes the use of other economic resources is called
A) labor.
B) capital.
C) entrepreneurship.
D) land.
C
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Which of the following correctly describes a way in which deficit spending can impose a burden on future generations? I
Failure to allocate deficit spending to uses that boost future real Gross Domestic Product (GDP) will require taxing future generations at a higher rate to repay the resulting higher public debt. II. Government deficits that lead to higher employment and real Gross Domestic Product (GDP) in the future will generate increased income taxes for future governments, which will respond by spending the higher tax revenues, creating higher future government budget deficits. III. Other things being equal, deficit spending fuels increased consumption of goods and services by the current generation that crowds out capital investment, thereby leaving future generations with a smaller stock of capital than otherwise would have existed. A) I only B) II only C) I and III only D) II and III only
Suppose you can type a paper in two hours or mow the lawn in four hours, while it takes your friend Gabriela eight hours to type a paper or two hours to mow the lawn. Which of the following is true?
a. You have a comparative advantage in typing. b. You have a comparative advantage in mowing the lawn. c. You and Gabriela could save time if you mowed her lawn while she typed your paper. d. You and Gabriela cannot gain from specialization and trade.
If the use of a common resource is not regulated,
a. no one can enjoy it. b. it will tend to be underused. c. property rights will be clearly defined. d. it will be overused.
Which of the following is often referred to as the basic postulate of economics?
a. Individuals act only out of selfish motives. b. Incentives matter; individuals respond in predictable ways to changes in personal costs and benefits. c. The accuracy of the assumptions is the best test of an economic theory. d. The value of a good is objective; it is equal to the cost of pro