Although finished goods are scarce, the inputs to produce them are not scarce
a. True
b. False
Indicate whether the statement is true or false
False
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To determine the change in the capital stock, the level of new investment must be adjusted for depreciation because some new investment
A) is not used immediately. B) replaces existing workers. C) is more efficient than existing capital. D) merely replaces existing, but worn out, capital.
Every necessity is a normal good, but not all normal goods are necessities.
Answer the following statement true (T) or false (F)
A belief that demand shocks are an important source of business cycle fluctuations implies a preference of ________
A) the new Keynesian model over the traditional Keynesian model B) the real business cycle model over the traditional Keynesian model C) the real business cycle model over the new Keynesian model D) the new Keynesian model over the real business cycle model
If Mr. McLean thinks the last dollar spent on bowling yields more satisfaction than the last dollar spent on hamburgers, and McLean is a utility-maximizing consumer, he should:
a. bowl less, so the marginal satisfaction from expenditures in this area will increase. b. spend more on hamburgers, so total satisfaction from that activity will increase. c. eliminate spending on hamburgers. d. bowl more and spend less on hamburgers.