Assume point A on a linear production possibilities curve represents the combination of 12 coffees and 3 cappuccinos, and point B represents 3 coffees and 6 cappuccinos. Suppose coffees are on the vertical axis and cappuccinos are on the horizontal axis. The opportunity cost of a cup of coffee is:
A. 1/3 of a cappuccino.
B. 6 cappuccinos.
C. 9 cappuccinos.
D. 3 cappuccinos.
Answer: A
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A single-price monopoly has marginal cost of $23 and marginal revenue of $28. Which of the following is definitely correct?
A) It is maximizing profit. B) To increase profit, it should produce less. C) To increase profit, it should produce more. D) It should shut down. E) It is making an economic profit.
According to your text, with the exception of South Africa, the record of economic growth in sub-Saharan Africa
A) is tragic. B) mirrors that of most of the Latin American countries. C) is about the same as South Korea. D) is respectable, but not fantastic.
Which of the following statements is true?
a. The doctrine of laissez-faire advocates an economic system with extensive government intervention and little individual decision-making. b. Adam Smith was the father of socialism. c. In capitalism income is distributed on the basis of need. d. Most real-world economies are mixed economic systems.
Which of the following is true of the White test?
A. The White test is used to detect the presence of multicollinearity in a linear regression model. B. The White test cannot detect forms of heteroskedasticity that invalidate the usual Ordinary Least Squares standard errors. C. The White test can detect the presence of heteroskedasticty in a linear regression model even if the functional form is misspecified. D. The White test assumes that the square of the error term in a regression model is uncorrelated with all the independent variables, their squares and cross products.