Pat can either drive to work, which takes half an hour and uses $1.50 worth of gas, or take the bus, which takes an hour and costs $1.00. How should Pat get to work?
A. Pat should take the bus if saving half an hour is worth $0.50 or more.
B. Pat should drive if saving half an hour is worth $0.50 or more.
C. Pat should drive because it saves half an hour relative to taking the bus.
D. Pat should take the bus because it costs $0.50 less than driving.
Answer: B
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Adrian reads about two theories, A and B. Theory A seems wrong to Adrian and theory B seems correct to Adrian. It follows that
A) theory B is correct, and theory A is not. B) both theories may be correct. C) both theories may be incorrect. D) theory A is trying to explain something completely different than theory B. E) b and c
"My son is a smart entrepreneur. Rather than borrow money from others, he used his own savings to start his music business, and thereby avoided paying interest on loans." An economist would respond by saying
A) "both you and your son are complete idiots." B) "it's always good to avoid borrowing and paying interest." C) "nobody can avoid paying interest, not even your clever son." D) "your son might have avoided paying interest, but he also avoided earning interest."
Capital and labor are distinct from technology since ________
A) technology is exogenous B) technology is rival in its use C) capital and labor are physical things D) technology is a physical thing
The loss-minimizing output for the perfectly competitive firm occurs at the point at which
A) TR - MR = minimum. B) TR - TC = maximum. C) MR = MC. D) TC - ATC = maximum.