The personal preferences of an individual determine the point he or she chooses on the budget constraint
a. True
b. False
Indicate whether the statement is true or false
True
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How is the public debt calculated?
A. By summing the annual government purchases over time B. By summing the annual difference between tax revenues and government spending over the years C. By subtracting current government spending from current government tax revenues D. By subtracting the government's total liabilities from its total assets
If the initial distribution of labor and capital is Pareto optimal, which of the following statements is TRUE?
A) It is possible to reallocate labor and capital across industries so as to increase the production of one good without decreasing the production of another good. B) It is possible to reallocate labor and capital across industries so as to increase the production of one good, but only by reducing the production of another good. C) It is possible to reallocate labor and capital across industries so as to increase the production of every good. D) none of the above
Suppose a mechanic uses $150,000 of his own money to start a business. The rate of interest he could earn in a savings account is 5 percent, and the rate of interest he could earn by investing in bonds is 8 percent. What is the opportunity cost of capital when the mechanic uses his money to start his own business?
a. $7,500/year b. $8,000/year c. $19,500/year d. $12,000/year e. $150,000/year
John Maynard Keynes's contribution to our understanding of the economy was to show that an economy can be in equilibrium with high levels of unemployment
Indicate whether the statement is true or false