Which of the following statements best represents a difference between short-run and long-run cost?
A) Less than one year is considered the short run; more than one year the long run.
B) There are no fixed costs in the long run.
C) In the short-run labor must always be considered the variable input and capital the fixed input.
D) All of the above are true.
B
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The function of money as a store of value diminishes if
A) money is no longer backed by gold. B) prices of goods and services increase. C) people begin to barter. D) interest rates increase.
Which of the following is responsible for the distribution of paper currency in the United States?
A) the U.S. Treasury B) the Office of the Comptroller of the currency C) the Federal Reserve D) all of the above
For each watch Denmark produces, it gives up the opportunity to make 50 pounds of cheese. Germany can produce one watch for every 100 pounds of cheese it produces. Which of the following is true with regard to opportunity costs in the two countries?
a. The opportunity cost of producing watches is lower in Denmark. b. The opportunity cost of producing cheese is lower in Denmark. c. The opportunity cost of producing watches is identical in both countries. d. It is impossible to compare opportunity costs because the two countries use different currencies. e. In Germany the opportunity cost of producing one pound of cheese is one watch.
Risk is shifted to the owners of a firm. In return they receive
A) normal wages. B) residual income. C) normal profit. D) marginal profit.