Related to the Economics in Practice on p. 83: The true cost of the Shakespeare in the Park tickets is
A. the cost to put on the performance.
B. $0 plus the opportunity cost of the time spent in line.
C. zero.
D. the additional cost to the city of extra security.
Answer: B
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Answer the following statement(s) true (T) or false (F)
1. An economic model is robust if it provides results that are testable and verifiable. 2. An easy, but not very insightful, possible explanation for apparently irrational behavior is that it is rational for a people with a taste for the behavior. 3. Most economic explanations can be reduced to the idea that human behavior is primarily a matter of taste. 4. Since economists assume that people act in their own self-interest, economic analysis does not apply to situations where people behave altruistically. 5. A model that is said to be robust is one that has many details and closely mimics reality.
Which of the following statements is true?
A) Command economies do a better job at maximizing social welfare in comparison to market economies. B) The incentive problem and the coordination problem lead to lower efficiency in market economies. C) Central planners in command economies have to make decisions that prices would have automatically made in market economies. D) Bringing economic agents together to trade is easier in command economies in comparison to market economies.
Suppose the production function is given by Q = 2K + L. If w = $4 and r = $4, how many units of K and L will be utilized in the production process?
A. All L and no K. B. All K and no L. C. A combination of K and L not represented above. D. Equal amounts of K and L.
The world price of a good is determined by the
A. demand for that good in the world market. B. country that produces the good. C. worldwide demand and supply of that good. D. supply of that good in the world market.