An optimal decision is one that is selected based on an analysis of
a. explicit costs but not implicit costs.
b. implicit costs but not explicit costs.
c. both explicit costs and implicit costs.
d. neither explicit costs nor implicit costs.
c
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At the optimal consumption bundle, the marginal rate of substitution of leisure for consumption is equal to
A) the real wage and the budget line is tangent to an indifference curve. B) minus the real wage and the budget line is tangent to the indifference curve. C) the real wage and the budget line intersects the indifference curve. D) minus the real wage and the budget line intersects the indifference curve.
Denmark has a comparative advantage in cheese production, and Holland has a comparative advantage in beer production
The two countries initially trade cheese and beer based on their comparative advantages, but the government of Denmark later closes the border to trade with Holland. What is the likely impact of this trade restriction? A) Danish cheese consumers are worse off, and beer producers in Holland are better off. B) Cheese consumers in both countries are worse off. C) Beer consumers in Holland are worse off, and cheese producers in Denmark are better off. D) Beer consumers in Holland are better off, and cheese producers in Holland are better off.
Keynesian economists see the quantity theory of money as proof that money cannot influence how much we produce, but does influence the prices of the goods we produce
Indicate whether the statement is true or false
Which of the following is not an exchange rate system?
a. Flexible exchange rates b. Crawling peg c. Fixed exchange rates d. Managed floating e. Purchasing power parity