What is the marginal cost of producing one unit of A for an economy that produces only two goods, A and B
The amount of B that must be given up to produce an extra unit of A is the marginal cost of producing one unit of A.
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Economic progress is best measured by
A. the growth rate of prices over time. B. the growth rate of GDP per capita. C. the amount of working time needed for an individual worker to afford certain goods and services. D. the annual growth rate in the population.
What is a "structural" relationship?
A) a relationship that depends on the basic behavior of consumers and firms and remains unchanged over long periods B) any relationship that cannot be anticipated C) a relationship that depends on the size of firm investments in capital such as buildings and other structures D) a relationship between any two variables that is temporary
Which of the following statements is false?
A) Asymmetric information can exist both before and after a transaction. B) Moral hazard occurs when one party to a transaction changes his or her behavior in a way that is hidden from and costly to the other party. C) Adverse selection has the potential to eliminate some markets. D) none of the above
A firm will increase its spending on advertising until
A) it has monopolized the market B) it has deterred all future entry C) the marginal benefit of advertising is zero D) the marginal benefit of advertising equals the marginal cost of advertising