Comparisons of GDP between developed and underdeveloped countries are often misleading because underdeveloped countries produce
a. a greater share of their total production in the household sector, which understates their GDP relative to developed countries.
b. a smaller share of their total production in the household sector, which understates their GDP relative to developed countries.
c. a greater share of their total production in the household sector, which overstates their GDP relative to developed countries.
d. a smaller share of their total production in the household sector, which overstates their GDP relative to developed countries.
A
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The assumption of diminishing marginal rate of substitution means that
A) the budget line has a negative slope. B) the budget line does not shift when people's preferences change. C) indifference curves might have a positive slope. D) indifference curves will be concave.
If diminishing marginal returns have already set in for Golden Lark Woodworks, and the marginal product of the 6th carpenter is 8 chairs, then the marginal product of the 7th carpenter is
A) more than 8 chairs. B) zero. C) negative. D) less than 8 chairs.
If a corporation fails, the last recipients of funds that may remain are
A) preferred stockholders. B) common stockholders. C) bond holders. D) government tax collectors.
A mortgage loan made to a borrower with a low credit score is called a:
A. prime mortgage. B. hi-risk mortgage loan. C. bundled financial loan. D. subprime mortgage.