An example of an implicit cost of production is:
a. the cost of raw materials used to produce bread in a bakery
b. the cost of labor in a factory that assembles DVD players.
c. the income an entrepreneur could have earned working for someone else.
d. all of the above.
c
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Why are social institutions such as firms, markets, property rights, and money necessary?
What will be an ideal response?
The planning horizon refers to the short run, when the firm must plan how much of a variable input to apply to a fixed input
a. True b. False Indicate whether the statement is true or false
Economists use the ceteris paribus assumption to see how ______.
a. long variables can be kept constant b. one variable influences another without interference from other variables c. several variables interact similarly to a real-world setting d. outside variables affect the two variable being studied
You borrow money to buy a house in 2009 at a fixed interest rate of 5.5 percent. By 2012, the inflation rate has steadily fallen to 1.5 percent from the recent high of 3.0 percent in 2009. Considering only your mortgage, is inflation good news or bad news for you?
A. bad news, because inflation hurts everyone B. bad news, because it makes the real value of your mortgage payments increase C. good news, because it makes the real value of your mortgage payments decrease D. bad news, because it makes the nominal value of your mortgage payments increase