The gross domestic product (GDP) of an economy for a particular year is likely to increase if _____
a. workers go on longer vacations during that year
b. the length of an average work week decreases
c. homeowners hire lawn care services rather than maintaining the lawns themselves
d. people cook food at home instead of buying restaurant meals
e. the sale of illegal drugs increases
c
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State and local governments finance expenditures mainly from
A) tax revenue. B) government bonds issued at the state level. C) funds provided by the federal government. D) private bank loans. E) lottery funds.
Isoquants are convex to the origin due to:
A) the law of diminishing marginal utility. B) the assumption of the diminishing marginal productivity of each input. C) the fact that as less capital is used, its marginal productivity falls. D) the fact that as more labor is used, its marginal productivity rises.
Moral hazard is the
A) outcome of a Prisoner's Dilemma. B) result of market signaling. C) risk associated with a Dutch auction. D) risk that one party to a contract may alter its post-contract behavior to the detriment of another party.
Based on this graph, which of the following would happen if P1 drops below the line where P is now?
a. The farmer would increase her profit.
b. The farmer would shut down.
c. The farmer would maintain equilibrium.
d. The farmer would hire more employees.