When deriving the production possibilities curve, it is assumed that
A) the amount of each good that is to be produced is fixed.
B) the prices of resources are fixed along the curve.
C) most resources can be used to produce only one good.
D) resources are efficiently used.
Answer: D
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The major assets and liabilities of a bank are
a. demand deposits and reserves, respectively b. demand deposits and gold, respectively c. reserves and demand deposits, respectively d. reserves and excess reserves, respectively e. demand deposits and excess reserves, respectively
If the slope of an indifference curve between two goods decreases as we move from left to right (dropping all minus signs), we infer that the consumer
a. is less willing to trade away a good when he has a lot of it. b. is more willing to trade away a good when he has a lot of it. c. always tries to keep the percentage of his budget spent on each good constant. d. views one of the goods as inferior.
Assume that each day a firm uses 13 employee-hours per day and an office to produce 100 units of output. The price of each unit output is $5, the hourly wage rate is $10, and rent on the office is $200 per day. Each day the firm earns a ________ of ________.
A. loss; $200 B. loss; $170 C. profit; $170 D. profit; $370
Rational behavior for an economist means that individuals
A) are motivated by self-interest. B) never change their minds. C) always value societal needs more than their own needs. D) are self-sacrificing.