Which would not be considered as capital by an economist?
A. An automobile used by a salesperson at General Electric
B. A crane used by a building contractor
C. A razor used by a barber
D. A share of corporate stock issued by General Motors
Answer: D
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Krystal runs a nail salon and needs to decide how many hours to stay open. Table 2.2 illustrates her marginal costs of staying open for each additional hour. Suppose that we observe Krystal staying open 2 hours per day
If she is following the marginal principle, what must her marginal benefit be? A) $6 B) $12 C) $15 D) $18
In the first half of 2008, food and energy costs in the United States increased. At the same time, the financial crisis slowed production. As a result, economists warned that the economy would
A) suffer an inflationary gap. B) see a decrease in aggregate demand and an increase in long-run aggregate supply. C) experience stagflation. D) see an increase in potential GDP.
It is useful to assume that there is a single representative consumer because
A) this is realistic. B) this is a useful abstraction if we are interested in problems where distribution effects are not important. C) this is the only model we know how to work with. D) a model with one consumer is the same as one with many consumers.
Refer to the above figure. Which one of the following statements is TRUE with regard to the economy depicted in the graph?
A) Point C cannot be produced. B) The best production point is 500 loaves of bread and 50 bales of wool. C) The total amount of resources it takes to produce 20 bales of wool and 500 loaves of bread is more than the amount of resources needed to produce 50 bales of wool and 250 loaves of bread. D) The total amount of resources it takes to produce 20 bales of wool and 500 loaves of bread is the same as the amount of resources needed to produce 50 bales of wool and 250 loaves of bread.