Joe's Taco Hut can purchase a delivery truck for $20,000 and Joe estimates it will generate a net income (after taxes, maintenance and operating costs) of $4,000 per year. His other option is to go to work for someone else earning net income of $3,000 per year. He should:
A. not purchase the truck if the real interest rate is greater than 1 percent.
B. purchase the truck if the real interest rate is less than 5 percent.
C. purchase the truck if the real interest rate is greater than 5 percent.
D. purchase the truck if the real interest rate is less than 15 percent.
Answer: B
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Production possibilities curves for large economies are generally bow-shaped because:
A. opportunity costs tend to decrease with increases in production. B. specialization gives some producers a comparative advantage. C. opportunity costs tend to increase with increases in production. D. as more resources are used to produce a good, those resources become less expensive.
Unemployment benefits in western Europe are more generous than in the United States. As a result, ________ in the United States
A) frictional unemployment is higher B) frictional unemployment is lower C) cyclical unemployment is higher D) structural unemployment is higher E) avoidable unemployment is lower
If the above figure illustrated a perfectly competitive industry, the equilibrium market output would be equal to
A) 7. B) 11. C) 13. D) 22.
Both buyers and sellers are price takers in a perfectly competitive market because
A) each buyer and seller is too small relative to others to independently affect the market price. B) both buyers and sellers in a perfectly competitive market are concerned for the welfare of others. C) the price is determined by government intervention and dictated to buyers and sellers. D) each buyer and seller knows it is illegal to conspire to affect price.