How are scarcity, choice, and opportunity cost related?
What will be an ideal response?
Since resources are scarce, we cannot have everything we want. This implies that we must make choices. We can't have everything we want, but we can have some of the things we want, and must choose. But when we choose one thing, we're prevented from choosing one or more other things. The highest-valued alternative good that we don't choose is the opportunity cost of the good we did select.
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Which of the following statements is false?
A. Another term for a Treasury bill is a T-bill. B. Treasury notes mature in 2 to 10 years. C. Treasury bonds are considered very safe investments, but Treasury bills are considered to be a more risky investment. D. It is unlikely the federal government will default on its bond obligations.
Which of the following categories of business cycle theories includes the theory of “real business cycles”?
a. physical b. monetary c. psychological d. spending and saving
The more firms that pay efficiency wages, the
A) more likely the economy will get stuck in a recessionary gap. B) less likely the economy will get stuck in a recessionary gap. C) more likely the economy will get stuck in an inflationary gap. D) more likely (over time) the economy will produce Natural Real GDP. E) b and c
The slope of an indifference curve defined over current and future consumption
a) is constant b) is equal to the rate of interest c) indicates the consumer’s rate of time preference, or impatience d) is flatter when the curve is farther away from the origin than when it is near the origin e) is undefined