Robinson Crusoe is stranded on an island. He finds that coconuts are freely available (zero harvest cost), but fish are difficult to harvest and require a lot of energy. As a result, harvesting fish has a high price
If coconuts and fish are imperfect substitutes, what is Robinson Crusoe likely to consume? A) He will consume more coconuts than fish.
B) He will consume more fish than coconuts.
C) He will consume equal amounts of both goods.
D) Not enough information is given.
D
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The main source of economies of scale is
A) better management. B) constant returns to plant size. C) specialization. D) long-run cost curves eventually sloping downward. E) increases in the labor force not matched by increases in the plant size.
Suppose it takes roughly two years for monetary policy to have a significant impact on inflation
If inflation is currently low but policymakers believe inflation will rise over the next two years with an unchanged stance of monetary policy, when should they tighten monetary policy to prevent the inflationary surge? A) now B) wait until overt signs of inflation appear C) next year D) two years later
If the nominal interest rate is 5 percent and there is no inflation, _____
a. the real interest rate exceeds 5 percent b. the real interest rate is less than 5 percent c. the real interest rate is 5 percent d. there is not enough information to determine the real interest rate e. the real interest rate is zero
The return to investment in human capital is observed
a. only when workers are assigned identical tasks. b. in the wage differential between workers. c. in the high school dropout rate in inner-city urban school districts. d. in the low wages of educated factory workers.