In Chapter 11, depreciation is assumed to be
A) a fixed proportion of real GDP.
B) a fixed proportion of the capital stock.
C) a fixed absolute amount.
D) zero.
E) a fixed proportion of the capital-labor ratio.
B
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In third-degree price discrimination, markets with a larger price elasticity of demand are ________ responsive to price changes and are charged ________ prices than markets with a smaller price elasticity of demand.
A) less; lower B) more; higher C) more; lower D) less; higher
Which of the following makes invention and entrepreneurship more likely in today's economy?
a. increasing morality of inventors b. government rules within society c. positive marginal costs d. positive marginal revenues
A production possibilities curve graphically represents the maximum quantities of two products produced when all resources in the economy are being used efficiently. If an economy operates at a point inside its production possibilities curve,
a. it lacks the resources necessary to produce at full employment. b. it is utilizing some resources inefficiently. c. it does not confront the problem of scarce goods relative to unlimited wants. d. it does not exist in the real world since it is impossible for an economy to operate inside its production possibilities curve.
Which of the following is an accurate example of a perfectly competitive market?
a. If the price of corn is $6 a bushel, a corn farmer will receive $8 a bushel for his corn. b. If the price of soybeans is $7 a bushel, a soybean farmer will receive $7 a bushel for her soybeans. c. If the price of alfalfa is $5 a bushel, an alfalfa farmer will receive $4 a bushel for her alfalfa. d. If the price of barley is $4 a bushel, a barley farmer will receive $8 a bushel for his barley.