The public choice model
A) applies economic analysis to government decision making.
B) applies economic analysis to the collective decision making of consumers.
C) examines the public's role in appointing politicians and ensuring that elected officials act in ways to reflect the public's preferences.
D) examines the degree of market power that the public exerts in a market economy.
A
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Caterpillar has spent $5 million to date on a new plant, and another $2 million is needed to complete the plant. When construction was started, it was projected that production at the new plant would add $12 million to Cat's profit, but new projections show the additional profit will be only $6 million. Assuming the incomplete plant is worthless, should Cat complete the new plant or abandon it?
a. Cat should complete the plant because it would create a net profit of $4 million. b. Cat should complete the plant because it would create a net profit of $1 million. c. Cat should abandon the plant because a $5 million loss is better than a $7 million loss. d. Cat should abandon the plant because it would create a net loss of $1 million..
Suppose Billy owns a hair salon in Dallas. He has one large hair dryer for which he paid $1,000. If he can sell the dryer one year later for $800, his total economic depreciation equals
A) $1,000. B) $200. C) $800. D) $1,800. E) None of the above answers is correct.
The table above shows techniques that can be used to produce 100 shirts. If the price of an hour of labor is $10 and the price of a unit of capital is $12, then the economically efficient technique is
A) W. B) X. C) Y. D) Z.
Provide two examples of economics being used as a tool by each of a student, a business, and a government. Classify your examples as dealing with microeconomic topics and macroeconomic topics
What will be an ideal response?