Potential output in an economy tends to happen very gradually due to which of the following?
a. changes in interest rates
b. changes the labor force
c. changes in the supply of money
d. none of the above affect potential output
b
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Ricardo's assumption for economic rents for land was based on
A) the supply of land being a fixed quantity. B) a shortage of land. C) a surplus of land. D) total government control of land.
Suppose that a firm has to pay a 10% tax on revenue. The profit-maximizing level of output is
a. unaffected by the tax. b. increased because of the tax. c. decreased because of the tax.
Which of the following is not an example of a systematic mistake that people make?
a. When asked to predict how many movie stars he can list, Ed says 200 but when put to the test he can only name 130. b. Susan watched a home improvement show in which a contractor installed a faulty deck which collapsed within 2 years of installation. She is now concerned about the safety of her own deck. c. Kate's manager asks her to work additional hours for which she will be paid her usual hourly wage. Kate weighs the value of her leisure time against the additional wages before responding to her manager. d. Bill has purchased Skillman tools for years and has recently noticed a decline in quality and durability of Skillman tools. Still, when he needs a new drill, he purchases a Skillman brand drill.
When individuals increase their personal wealth through production and exchange, they
What will be an ideal response?