Despite specialization and comparative advantage, household production still exists because for some households
a. the opportunity cost of production at home is greater than the cost of purchasing the good in the market
b. production at home is less costly than purchasing the good in the market
c. the value of home production exceeds the sunk cost of home production
d. the value of home production is ignored
e. food and clothing expenditures represent a small portion of their total budget
B
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During the Black Plague, capital became worthless. What can explain this?
A) Capital's marginal product fell because there was less labor. B) Capitalists died off at a greater rate than the workers. C) Capital's marginal product increased but the marginal product of labor decreased. D) Workers forgot how to use the capital.
Accountants calculate __________ differently than do economists: a. Total revenue
b. Total costs. c. Profits. d. Both total costs and profits.
If an economy's investment outlook improves, leading to increased borrowing to finance new building projects, what is likely to happen to interest rates?
a) Interest rates will fall to 0%. b) Interest rates will fall. c) Interest rates will rise. d) Interest rates will stay the same.
In the globalized AS/AD model, the world supply curve is:
A. horizontal. B. vertical. C. downward-sloping. D. upward-sloping.