Economic theory asserts that an optimal decision is one that:
a. ignores implicit costs.
b. ignores explicit costs.
c. ignores the time frame in which costs and benefits are incurred.
d. has chosen to undertake all of those activities that add to net gains.
Ans: d. has chosen to undertake all of those activities that add to net gains.
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Suppose that we interpret N as the "effective" labor supply. A "labor-augmenting" technological improvement, when graphed in the Solow growth model, causes (Y/N) to ________ and real GDP per person to ________
A) rise, rise B) rise, fall C) fall, rise D) fall, fall E) fall, remain unchanged
Suppose that the production function for the economy is: Y = AK1/4L3/4. Assume that real GDP is $8,000 billion, capital stock is $32,000 billion, and the labor supply is 120 million (or 0.120 billion) workers
An increase of one worker will increase real GDP by A) $8. B) $50,000. C) $720,000. D) $6,000,000.
When toilet paper sales increase, quarterly economic growth tends to rise. This is an example of:
A. correlation without causation. B. the presence of ceteris paribus. C. causation with no correlation. D. two variables that are negatively correlated.
When the price of pens went from $1 to $1.50, the quantity demanded of pencils changed from 50 to 75 a day. The cross-price elasticity of demand for pencils (using the initial value formula) is:
A. 1. B. 0.4. C. 0.2. D. -0.2.