The consumer faces a budget constraint because the market price of X is $3, the market price of Y is $3, and the consumer's budget is $90.How many units of X and Y would be purchased?
A. 0 units of X, 0 units of Y.
B. 20 units of X, 20 units of Y.
C. 30 units of X, 30 units of Y.
D. 10 units of X, 20 units of Y.
Answer: D
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Interest is considered a(n)
A) explicit cost when the firm pays a bank to borrow money. B) implicit cost when the firm owner uses his or her own funds to buy capital. C) return to entrepreneurship if the firm owner uses her own funds to buy capital. D) form of depreciation if the cost of borrowing increases. E) Both answers A and B are true.
A village has five residents, each of whom has an accumulated savings of $50. Each villager can use the money to buy a government bond that pays 10 percent interest per year or to buy a year-old goat, send it onto the commons to graze, and sell it after one year. The price of the goat that the villager will get at the end of the year depends on the amount of weight it gains while grazing on the commons, which in turn depends on the number of goats sent onto the commons, as shown in the table below. Assume that if a villager is indifferent between buying a bond and buying a goat, the villager will buy a goat.Number of goatson the commonsPrice per 2-yearold goat ($)Income pergoat ($/year)180302752537020465155555 If each villager is purely self-interested, how many goats will be sent onto
the commons? A. 5 B. 3 C. 2 D. 4
Which statement is true?
A. On the production possibilities frontier there is zero unemployment. B. On the production possibilities frontier 95 percent of the labor force is employed. C. To get out of a recession, we must produce at some point beyond our production possibilities frontier. D. To have economic growth, we must push the production possibilities frontier inward.
Barriers to entry:
A. can result from government regulation. B. usually result in pure competition. C. exist in economic theory but not in the real world. D. are typically the result of wrongdoing on the part of a firm.