Suppose you own your own pizzeria. All of the following are implicit costs except
A. the income you could have made using your delivery truck to do something else.
B. the gasoline used when you deliver pizzas.
C. the wages you could earn making pizza for your competitors.
D. the interest forgone on the money you invested in your restaurant.
B. the gasoline used when you deliver pizzas.
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Compare two economies A and B that start out with identical production possibilities curves. Economy A chooses an efficient point with 6 consumption goods and 3 capital goods, while economy B also chooses an efficient point, but with 4 consumption goods and 5 capital goods. In the future we can predict:
a. economy A will operate inefficiently. b. economy B will operate inefficiently. c. economy A and economy B will grow equally fast. d. economy A will grow faster than economy B. e. economy B will grow faster than economy A.
Dean bakes his famous apple pies and sells them at the local farmer's market. If the price of apples increases, the
a. supply curve for Dean's pies will increase. b. supply curve for Dean's pies will decrease. c. demand curve for Dean's pies will increase. d. demand curve for Dean's pies will decrease.
Historical evidence for the U.S. economy indicates that
a. recessions have occurred roughly once every six years since the 1960s. b. the unemployment rate usually decreases during a recession and increases shortly after the recession ends. c. real GDP usually remains roughly constant during a recession and decreases shortly after the recession ends. d. changes in real GDP over the business cycle are largely attributable to changes in investment over the business cycle.
Suppose you are the manager of a local water company, and you are instructed to get consumers to reduce their water consumption by 10 percent. If the price elasticity of demand for water is 0.25, by how much would you have to raise the price of water?
A. 10 percent B. 25 percent C. 40 percent D. 100 percent