Refer to the graph below. Which point in the graph would allow a simultaneous increase in the production of both investment and consumer goods?
A. A
B. B
C. C
D. D
Answer: D
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Which of the following is NOT an example of the efforts to reduce the adverse selection problem?
A. Sellers offer warranties. B. Consumers invest in information. C. Sellers offer money-back guarantees. D. All of these are examples of efforts to reduce adverse selection.
Which of the following will cause a change in the exchange rate?
A) changes in real interest rates B) changes in consumer preferences C) changes in the perception of economic stability D) all of the above
A diagram of an individual's utility from income will be a line with an increasing slope if the individual is risk-averse.
Answer the following statement true (T) or false (F)
Ashley recently began running her husband's lumber mill. Last month she took in $5,000 in sales revenue and paid $3,400 in out-of-pocket costs. Did the lumberyard make an economic profit last month?
a. Definitely not b. Yes. After considering non-zero explicit and implicit costs, it is clear that her profit is exactly equal to $1,600. c. Without knowing the magnitude of implicit costs, it is not possible to state whether the lumberyard earned an economic profit last month. d. Yes, after factoring implicit costs, it is clear that her profit will exceed $1,600.