Gross domestic product (GDP) is a good measure of social welfare since it includes the value of leisure time
a. True
b. False
Indicate whether the statement is true or false
False
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What is the difference between economic profit and accounting profit?
What will be an ideal response?
Sadie works at a factory for $15 an hour and typically works 40 hours a week. Sadie gets a pay raise and now earns $20 an hour. She decides to work 45 hours a week at $20 an hour. Her response to the pay increase demonstrates the:
A. income effect outweighing the price effect. B. price effect outweighing the income effect. C. income effect outweighing the substitution effect. D. labor effect outweighing the price effect.
A rational decision maker takes an action only if the
a. marginal benefit is less than the marginal cost. b. marginal benefit is greater than the marginal cost. c. average benefit is greater than the average cost. d. marginal benefit is greater than both the average cost and the marginal cost.
Which of the following is an example of explicit costs of production on a dairy farm?
a. payments made for cattle feed and veterinary services b. payments received from customers for milk and cheese c. amounts lost by not leasing out the farm’s grazing fields d. the salary the farmer could have earned working in town instead