Mike's housekeeper charges $30 for mowing his lawn. Refer to the scenario above. Which of the following will happen if Mike decides to mow his lawn by himself?
A) GDP will increase.
B) GDP will decrease.
C) Per capita income will increase.
D) GDP will remain unchanged.
Answer: B) GDP will decrease.
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What are the two principles of fairness that are applied to tax systems?
What will be an ideal response?
When Wal-Mart decides to build a new retail store in a town, it will decide to build a large store rather than a small store if the large store is expected to earn a greater economic profit
What other motive would Wal-Mart have for choosing to build a large store? A) A larger store will help Wal-Mart maintain its position as the leading retail company in the world more than a smaller store would. B) Because of economies of scale, the average total cost of production is less for a larger store than a smaller store. C) A larger store will give Wal-Mart greater political influence in the community. D) A larger store may deter entry into the town by a rival firm.
How is accountability achieved for the Federal Reserve and is it clear?
What will be an ideal response?
A firm used to produce a product using three units of labor and one unit of capital. The firm discovers that it can produce more output at a lower cost if it combines two units of labor with two units of capital. This is an example of
A. an innovation. B. increasing returns. C. economic growth. D. an invention.