Which of the following is an implicit cost of owning a business?
(i) interest expense on existing business loans
(ii) forgone savings account interest when personal money is invested in the business
(iii) damaged or lost inventory
a. (i) only
b. (ii) only
c. (i) and (ii)
d. All of the above are correct
Answer: b. (ii) only
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When comparing the annual inflation rate in the United States based on the CPI with the annual inflation rate based on the PCE price index, the data show that the
A) CPI measure tends to exceed the PCE price index measure. B) PCE price index measure tends to exceed the CPI measure. C) CPI measure and the PCE price index measure are equal. D) CPI measure and PCE price index measure move in opposite directions. E) CPI deflator and PCE price index cannot be compared because they measure prices of different baskets of goods and services.
Using supply and demand curve analysis, the triangular area below the equilibrium price and above the supply curve is: a. consumer surplus. b. producer surplus. c. marginal cost
d. deadweight loss.
An increase in the money supply shifts the aggregate-supply curve to the right
a. True b. False Indicate whether the statement is true or false
Refer to Table 7-3. Select the statement that accurately interprets the data in the table.
A) Celeste has a comparative advantage in making saddles. B) Mateo has an absolute advantage in making spurs. C) Mateo has a comparative advantage in making saddles. D) Mateo has a comparative advantage in making saddles and making spurs.