The value of total output decreases when labor leaves one industry and goes to another and capital leaves the second industry and goes to the first. This indicates that
A. the first situation was not efficient.
B. it would be efficient to return to the first situation.
C. the second situation is efficient.
D. price is greater than marginal cost.
Answer: B
You might also like to view...
Duration analysis involves comparing the average duration of the bank's ________ to the average duration of its ________
A) securities portfolio; non-deposit liabilities B) assets; liabilities C) loan portfolio; deposit liabilities D) assets; deposit liabilities
Refer to Figure 9.1. Assume the economy is initially at point A. The initial change from a shock that increases investment expenditure is best represented by which short-run equilibrium combination of price level and real GDP?
A) P2; Y2 B) P3; Y2 C) P1; Y2 D) P2; Y1
If the insurance company offers the insurance for $1,500, then the theory of adverse selection predicts that
Suppose that Dirk and Rollergirl are both considering purchasing insurance. Dirk's "expected loss" is equal to $1,600. Rollergirl's expected loss is equal to $1,200. Also, both Dirk and Rollergirl are "risk averse," and so each of them is willing to buy insurance for an amount that's up to $200 in excess of his/her expected loss. A. both of them will agree to purchase the insurance. B. dirk will purchase the insurance, but Rollergirl will decide that it's too expensive. C. neither one of them will agree to purchase the insurance. D. both of them will agree to purchase the insurance, but the insurance company will still lose money regardless.
Humberto is the chief operational officer (COO) of the SodaSopa Company and currently serves on the board of directors of the Helium Company of America. Humberto is considered ________ of the Helium Company of America
A) a managing director B) an inside director C) an unpaid advisor D) an outside director