The best definition of economics is
A) how choices are made under conditions of scarcity.
B) how money is used.
C) how goods and services are produced.
D) how businesses maximize profits.
A
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A small Caribbean island-country produces only pineapples and rum. If resources are used efficiently in the economy,
A. it will not be possible to produce more rum without decreasing the production of pineapples. B. it will be possible to produce more pineapples without decreasing the production of rum. C. it will be producing on its production possibilities curve. D. it will not be possible to produce more rum without decreasing the production of pineapples AND it will be producing on its production possibilities curve.
How does scarcity affect the range of possible choices that decision makers face?
A. It narrows the choice to a single option. B. It narrows the range of choices. C. It increases the possible methods for solving problems. D. It clarifies the choices by highlighting the best solutions. E. It simplifies the choices and therefore widens the range.
Suppose you run a charity that raises money for a worthy public good. Your donors may be concerned about how much of each dollar that is raised is put back into more fund-raising. a. Suppose the marginal product of a dollar put into fundraising is initially increasing but eventually diminishing. How much will the last dollar spend on fundraising raise?
b. If everyone considers their own contribution to this charity as the marginal contribution, what will be their impression of how much they are really helping the public good? c. Would you expect your answer to (b) to make it harder for you to raise money for your charity? d. How might your answer to (c) explain why some charities make a point of informing people that they have placed a cap on their fund raising budget -- or that they have placed a cap on how many people will be approached during the fund raising campaign? What will be an ideal response?
A temporary adverse productivity shock would
A) shift the labor supply curve upward. B) decrease the level of employment. C) decrease future income. D) decrease the expected future marginal product of capital.