The lack of investment in developing countries is at least in part attributable to:
A. high levels of foreign aid.
B. low levels of domestic savings.
C. inappropriate education.
D. overpopulation.
Answer: B
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Individuals who specialize in activities that lower transaction costs are
A) consumers. B) producers. C) bureaucrats. D) middlemen.
Suppose that the DeBeers company faces very little competition from other firms in the wholesale diamond market. Why isn't the price of wholesale diamonds $10,000 per carat?
a. because the government would not allow such a high price b. because stockholders would not allow such a high price c. because the company would sell so few diamonds that it would earn higher profits by selling at a lower price d. All of the above are correct.
Technical efficiency is achieved when a firm produces
A. Enough output to cover the opportunity cost of resources. B. An amount less than or equal to the production function. C. Below the opportunity cost for the resources it uses. D. At an amount indicated by a point on the production function.
Which of the following statements is not true about the consumption function?
A. It shows how consumption is influenced by disposable income. B. The equation is written as C = a + bYD. C. It indicates that consumption is inversely related to disposable income. D. It indicates the rate of consumer spending that will take place at various disposable income levels.