Refer to the accompanying figure. It is efficient for this farmer to:
A. grow 1,000 bushels of wheat and 500 bushels of corn.
B. grow 250 bushels of wheat and 500 bushels of corn.
C. grow 500 bushels of wheat and 500 bushels of corn.
D. grow 500 bushels of wheat and 250 bushels of corn.
Answer: D
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The indirect effect of an increase in the money supply is to
A) raise interest rates so people will save more. B) lower interest rates, which stimulates both investment and consumption spending. C) put more cash in people's pockets, thereby increasing aggregate demand. D) pay off a portion of the public debt.
If it is particularly difficult for the corporate headquarters to determine the correct transfer price
a. average costs is a good enough approximation b. average variable costs is a good enough approximation c. a similar products market price is a good enough approximation d. the upstream division could be run as a cost center
An example of a positive externality is
a. pollution because it affects people not directly involved with producing it b. a homeowner's maintenance of a beautiful lawn because this creates a benefit for neighbors c. creating a monopoly d. driving a car that emits pollution e. cigarette smoking because this imposes an indirect cost on people around the smoker
The demand for labor curve depicts the inverse relationship between the wage rate and the revenue generated by each unit of labor
a. True b. False Indicate whether the statement is true or false