Efficiency involves:
a. producing only one out of many possible commodities.
b. producing output using the least amount of labor.
c. producing as far inside the production possibilities frontier as possible.
d. getting the maximum possible output from available resources.
e. producing output using the least amount of capital.
Answer: d. getting the maximum possible output from available resources.
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Chuck Stake never eats vegetables, although he can afford to buy them. According to the economic way of thinking, Chuck
A) must have a serious physiological aversion to vegetables. B) was probably forced to eat them as a kid, and now hates them. C) believes the additional benefits from eating vegetables are outweighed by the additional costs. D) has studied economics enough to know that nobody needs to eat their vegetables.
If two variables are unrelated, a scatter diagram of those variables will
A) be a vertical line. B) be a horizontal line. C) be either a vertical or horizontal line. D) have a constant positive slope.
Assume both the marginal cost and the average variable cost curves are U-shaped. At the minimum point on the AVC curve, marginal cost must be: a. greater than the average variable cost. b. less than the average variable cost
c. equal to the average variable cost. d. at its minimum.
In periods of high inflation,
a. people want to hold on to as much money as possible. b. the purchasing power of money is decreasing. c. nobody wants to work and earn income. d. low nominal interest rates are likely to result. e. nobody wants to buy goods and services.