Which is the correct match of an economic resource and payment for that resource?
a. Entrepreneurial ability and wages
b. Capital and interest income
c. Land and profit
d. Labor and rental income
b. Capital and interest income
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Price taking producers make zero economic profit when price falls
A. at the lowest point of the average cost curve B. at the point where marginal cost crosses average cost C. at the lowest point of the marginal cost curve D. both (a) and (b) E. both (a) and (c) F. both (b) and (c) G. All of the above H. None of the above
During Global Financial Crises, housing starts in the US fell by
A) 76%. B) 25%. C) 30%. D) 95%.
A lighthouse is a public good
A) because it doesn't cost any more to light the way for 105 ships than it does to light the way for 104 ships, but for no other reason. B) because there is no way to prevent those who haven't contributed to the lighthouse from seeing better because of it, but for no other reason. C) because the government produces it, and for no other reason. D) for the reasons in A and B together. E) for the reasons in A, B, and C together.
Which of the following is not true about moral hazard?
A. It increases the difficulty of operating private insurance markets. B. It increases the difficulty of operating public insurance markets. C. It is the tendency of people to change behavior when insured. D. It is the tendency of people with higher risks to buy more insurance.