An example of capital is:
A) cash.
B) a factory building.
C) money in a checking account.
D) the existing state of technology.
Ans: B) a factory building.
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One of the methods of reducing the geographical disadvantage faced by poorer countries is:
A) by moving to a socialist economic system. B) by undertaking large-scale disease eradication programs. C) by borrowing financial resources at market interest rates. D) by reducing participation in international trade.
If the government implements a tax on the general public to pay for street lighting in one neighborhood,
A) the tax redistributes well-being and the benevolent social planner is not pleased. B) the tax redistributes well-being, but the benevolent social planner is pleased. C) the tax reduces well being and the benevolent social planner is not pleased. D) the tax has no bearing on well-being and the benevolent social planner is indifferent.
Which of the following is a characteristic of command economies?
A) Rewards to economic agents are based on market prices. B) Coordination of economic agents is automatic. C) It is difficult to incentivize economic agents. D) The invisible hand functions without any restraint.
Harold, a delivery man, washes and irons his own shirts. Sarah, his boss, sends her clothes to a laundry. Which is the most plausible economic explanation for this difference?
a. Harold must enjoy ironing more than Sarah does. b. Harold must be better at ironing than Sarah is. c. The opportunity cost of ironing is greater for Harold. d. Harold probably has an absolute advantage in ironing. e. Sarah has a higher opportunity cost of laundering her clothes than Harold does.