Recall the Application about Rory McIlroy and weed-whacking to answer the following question(s). The Application assumes that Rory McIlroy could whack down all the weeds on his estate in one hour at an opportunity cost of $1,000, but it would take 20 hours for a gardener to do it at a price of $10 per hour.If Rory McIlroy only earned $500 per hour playing golf instead of $1,000 per hour, what should he do?
A. He should still hire the gardener.
B. He should do the weed-whacking himself.
C. He should hire a less-productive gardener.
D. He should be indifferent as to who does the weed-whacking, for the difference in hourly earnings would now be insignificant.
Answer: A
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Explain why deflation could prevent people from being able to repay their debts
What will be an ideal response?
A member of a cartel like OPEC has an incentive to
A) support equal production quotas for each member. B) argue for larger production quotas for each member of the cartel. C) abide by its individual production quota. D) agree to a low cartel production level and then produce more than its quota.
A good measure of the standard of living is
A) total real GDP. B) real GDP per capita. C) total nominal GDP. D) nominal GDP per capita.
The price of video cassette recorders (VCRs) remains constant, but the market demand curve for VCRs shifts leftward as consumers shift to DVDs and other video technologies
What happens to the consumer surplus in this market as the demand curve shifts? A) Increases B) Decreases C) Remains the same D) We do not have enough information to answer this question.