In a properly functioning economy, money costs approximate opportunity costs.
Answer the following statement true (T) or false (F)
True
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The federal government debt ________ when the federal government runs a deficit and ________ when the federal government runs a surplus
A) increases; increases B) decreases; decreases C) increases; decreases D) decreases; increases
Suppose that a worker in Country A can make either 10 iPods or 5 tablets each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPods or 10 tablets each year. Country B has 200 workers. Suppose Country B's population of workers increased to 600. We can say:
A. Country B now possesses the absolute advantage in the production of both goods. B. Country B now possesses the absolute advantage in tablets only. C. Country B now has the comparative advantage in iPod production. D. Country B has no need to trade now.
When a firm incurs losses in the short run, the most important consideration in determining whether to continue producing is whether
a. marginal cost equals marginal revenue b. average total cost is at its minimum c. average variable cost is at its minimum d. revenues cover some of its fixed costs and all of its variable cost e. total revenue exceeds total cost
Ongoing inflation has its own momentum because
a. prices rise whenever firms see other prices rising b. the public learns to expect inflation and adjusts its decisions in response c. public officials are unwilling to stop prosperity d. more and more people now have jobs e. we are always playing catch up, trying to get what we lost when others raise prices