Real shocks to one area of the economy:
A. can be amplified and transmitted to other areas of the economy.
B. generally remain isolated to that area of the economy.
C. can cause nominal shocks to other areas of the economy.
D. always become weaker as they spread to other areas of the economy.
Ans: A. can be amplified and transmitted to other areas of the economy.
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You are more likely to hire your teenage child to cut your lawn than a landscaping firm
a. since the teenager is paid each time when she finishes and the landscaping firm bills your credit card each month b. if the teenager has a lower opportunity cost of cutting the lawn than the landscaping firm does c. because the teenager is less likely to have the specialized tools necessary to complete the job quickly d. due to the bounded rationality of the diversified landscaping firm e. when it does not take a substantial amount of time and effort to find a reputable landscaping firm to do the job
If a firm in a perfectly competitive market faces a market price of $8, and it decides to increase its production from 300 units to 550 units, the firm's total revenue will:
A. increase from $2,400 to $4,400. B. decrease from $4,400 to $2,400. C. stay the same at $8. D. likely rise, but it cannot be determined by how much.
The rule guiding international specialization of production is that a country should specialize in the production of the good
a. for which it has the highest opportunity cost b. for which it has the lowest opportunity cost c. that it most wants to consume d. for which it has an absolute advantage e. that it can produce with the least quantity of capital
A renewable resource:
A. is used to regenerate an old piece of capital. B. cannot be replenished naturally over time. C. can be replenished naturally over time. D. is used when adopting new technology, and replacing old capital.