An important characteristic of private goods is
A. the principle of joint consumption.
B. the principle of conspicuous consumption.
C. the nonexclusion principle.
D. the principle of rival consumption.
Answer: D
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The Fed can make loans to the general public at the discount rate
a. True b. False Indicate whether the statement is true or false
Normative economics is:
a. usually incorrect. b. a statement of fact. c. the analysis of what is. d. the study of what ought to be. e. free of value judgments.
Two stores—Lazy Guys and Ralph's Recliners—are located in the same city. Both stores buy recliner chairs from the same manufacturer at the same price and both stores are about the same size, so that the fixed costs of production for both stores are
the same. Ralph's Recliners sells more recliners per month and Ralph's has a lower average total cost of production. Which of the following can explain why the average total cost of production is lower for Ralph's Recliners? A) Because Ralph's Recliners sells more output its average fixed costs are lower than Lazy Guys' average fixed costs. B) The rent Lazy Guys pays for its building is greater than the rent paid by Ralph's Recliners. C) Ralph's explicit costs are less because Ralph owns the land on which his building is located. Lazy Guys must make lease payments for the land on which its store is located. D) The price of recliners charged by Ralph's is greater than the price charged by Lazy Guys.
The statement that "since a farmer will make more money if he has a bumper crop means that all farmers would make more money if they all had bumper crops" would be an example of which of the following?
A. the fallacy of composition B. truth in an obvious form C. the fallacy that correlation is the same as causation D. A) and B)