When a firm is making a profit-maximizing production decision, which of the following principles of economics is likely to be most important to the firm's decision?
a. The cost of something is what you give up to get it.
b. A country's standard of living depends on its ability to produce goods and services.
c. Prices rise when the government prints too much money.
d. Governments can sometimes improve market outcomes.
a
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The fact that output gaps will not last indefinitely, but will be closed by rising or falling inflation is the economy's:
A. income-expenditure multiplier. B. self-correcting property. C. short-run equilibrium property. D. long-run equilibrium property.
James used $200,000 from his savings account that paid an annual interest of 10% to purchase a hardware store. After one year, James sold the business for 300,000 . His accounting profit is:
a. $300,000 b. $100,000 c. $80,000 d. $20,000
Leo is a welfare recipient who qualifies for two means-tested cash benefit programs. If he does not earn any income, he receives $225 from each program. For each dollar he earns (which his employer is required to report to the welfare agency), his benefit from each program is reduced by 75 cents until the benefit equals zero. Suppose Leo earns $10. He will lose ________ from each benefit, for a total loss of ________.
A. $.75; $1.00 B. $7.50; $15.00 C. $7.50; $7.50 D. $.75; $1.50
Sam Voter prefers Jack to Rob, Rob to Mark, and Jack to Mark. Sam's preferences:
A. are transitive. B. indicate that he is a liberal. C. are not complete. D. are not consistent with our assumptions about consumer behavior.