A geologist tells the ACME Mining Company that she's certain there is a gold vein one thousand feet below the surface of its property, but ACME still decides not to mine for that gold. How would an economist explain their decision?
What will be an ideal response?
The owners of ACME feel the additional costs of mining for this gold outweighs the additional benefits.
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To explore the rationale for specialization, economists use the
A) real-nominal principle. B) principle of opportunity cost. C) marginal principle. D) principle of marginal exchange.
In terms of utility theory, "equilibrium" in the real world means that
a. households are consuming as much of every commodity as they would like b. households have spent their incomes in such a way that their overall satisfaction is maximized c. households have spent their incomes in such a way that their marginal utility is maximized d. households have spent their incomes in such a way that their marginal utility is zero for every product consumed e. households have spent their incomes in such a way that their total utility is zero
When the economy is to the right of the potential GDP, what type of gap exists?
a. An unemployment gap b. A structural gap c. A recessionary gap d. An inflationary gap
Which of the following is not one of the methods of calculating the cost of common stock?
a. capital asset pricing model b. bond yield plus risk premium model c. dividend growth model d. capital liabilities assessment model e. none of these