Answer the question on the basis of the following information. A farmer who has fixed amounts of land and capital finds that total product is 24 for the first worker hired; 32 when two workers are hired; 37 when three are hired; and 40 when four are
hired. The farmer's product sells for $3 per unit and the wage rate is $13 per worker. Refer to the given information. What is the farmer's profit-maximizing output?
A. 20.
B. 32.
C. 37.
D. 40.
Answer: C
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A production possibilities frontier has a downward slope because
A. increased production of one good always reduces the additional profit of production. B. decreased production of one good is associated with lower profit from that good. C. economists have a negative view of life and human nature. D. increased production of one good always reduces production of the other. E. increased production of one good necessarily causes production of other goods to increase.
The collapse of the Bretton Woods system marked
A) the end of floating exchange rates and a move to fixed exchange rates. B) marked the end of fixed exchange rates and a move to floating exchange rates. C) the beginning of the gold standard. D) a plunge in the price of gold. E) the elimination of paper currencies.
Which of the following is an example of a negative externality?
a. Planting flowers in your front yard. b. Talking loudly when others are trying to study economics. c. People donating money to charity. d. The price of bread increases. e. Accidentally pushing someone as you try to cross the street.
Private investment equals
a. private savings + public savings + trade deficit. b. private savings + public savings+ government budget surplus. c. private savings + public savings + trade surplus. d. private savings + public savings + government budget deficit.