The implicit cost of capital is:
a. the expense associated with leasing machines.
b. the expense associated with buying machines.
c. the opportunity cost of capital used by a business
d. irrelevant for determining economic profit.
c. the opportunity cost of capital used by a business
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The classical theory states that
a. demand is generally greater than supply. b. supply creates its own demand. c. supply is generally greater than demand. d. prices and interest rates are always stable.
(Last Word) The post hoc fallacy and the correlation problem both relate to:
A. the calculation of marginal costs and marginal benefits of any economic activity. B. the issue of determining causation. C. the frequent inability of households and businesses to behave rationally. D. the trade-off problem associated with competing goals.
Suppose the Chinese yuan increases in its value relative to the U.S. dollar. In the U.S. economy,
A. the price level will fall and real GDP will increase if the increase in aggregate supply is greater than the decrease in aggregate demand. B. the price level will fall and real GDP will decrease if the decrease in aggregate demand is less than the increase in aggregate supply. C. the price level will increase and real GDP will fall if the increase in aggregate demand is less than the decrease in aggregate supply. D. the price level will increase and real GDP will fall if the decrease in aggregate demand is more than the increase in aggregate supply.
If marginal utility is positive, then total utility is:
A. constant. B. negative. C. increasing. D. decreasing.