The cost disease of the service sector in recent years is the result of
A. market failure.
B. government intervention.
C. collective bargaining by unions.
D. uneven productivity growth.
Answer: D
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A consumer is a borrower if
A) optimum current consumption is less than current disposable income. B) optimum current consumption is greater than current disposable income. C) future disposable income is greater than current disposable income. D) the consumer's indifference curves are relatively steep.
"An objective of firms is to maximize profits". This statement:
a) has been proven by empirical testing to be always true. b) is a normative statement and thus cannot be tested. c) is an unrealistic assumption, and therefore of little use to economists d) is an assumption used by economists to predict the behaviour of firms. e) applies only to corporations
The Leontief production function:
A. is Q = max{bK, cL}. B. is Q = aK + bL. C. implies inputs are used in fixed proportions. D. implies inputs are used in variable proportions.
An example of a good that is rival in consumption is:
A. an air show over the whole city. B. a floral display at a large university's graduation ceremony. C. a scientific discovery that allows florists to grow flowers to which no one is allergic. D. a Big Mac.