According to the theory of cost, specialization in the use of variable resources in the short-run results initially in:
a. decreasing returns and declining average and marginal costs
b. increasing returns and declining average and marginal costs
c. increasing returns and increasing average and marginal costs
d. decreasing returns and increasing average and marginal costs
e. none of the above
b
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You use U.S. currency to pay the owner of a restaurant for a delicious meal. The currency
a. has no intrinsic value. The exchange is an example of barter. b. has no intrinsic value. The exchange is not an example of barter. c. has intrinsic value. The exchange is not an example of barter. d. has intrinsic value. The exchange is not an example of barter.
Which is the correct match of an economic resource and payment for that resource?
a. Entrepreneurial ability and wages b. Capital and interest income c. Land and profit d. Labor and rental income
Refer to Figure 4-9. What is the size of the unit tax?
A) $8 B) $5 C) $3 D) cannot be determined from the figure
If a bank has more rate-sensitive assets than rate-sensitive liabilities
A) it reduces interest rate risk by swapping rate-sensitive income for fixed rate income. B) it reduces interest rate risk by swapping fixed rate income for rate-sensitive income. C) it increases interest rate risk by swapping rate-sensitive income for fixed rate income. D) it neutralizes interest rate risk by receiving and paying fixed-rate streams.