The principle of marginal analysis is useful when trying to:
a. find ways to average costs.
b. find ways to further income equality.
c. make decisions that maximize net gains.
d. make either/or decisions.
Ans: c. make decisions that maximize net gains.
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An increase in the demand for washing machines might be caused by
A. a decrease in the number of buyers. B. an expected increase in the price of washing machines. C. a decrease in the price of washing machines. D. an expected decrease in the price of washing machines.
Jerome has a "C" average in his philosophy course and a "B" average in his economics course. He decides to study an extra hour for his philosophy exam. This is an example of
A) ceteris paribus. B) caveat emptor. C) using assumptions to simplify. D) thinking at the margin.
Assume that workers have perfect information about changes in inflation. Which of the following statements is true in this context?
a. Wage rates will not adjust immediately to the price level on account of the fixed contracts. b. The aggregate supply curve of the economy will become perfectly elastic. c. The aggregate supply curve will shift to the right. d. Nominal wage rates will always exceed the real wage rate. e. The economy will continue to produce at the potential level of real GDP.
Changes in technology can increase labor productivity without there being any change in capital stock
Indicate whether the statement is true or false