Jim left his previous job as a sales manager and started his own sales consulting business. He previously earned $70,000 per year, but he now pays himself $25,000 per year while he is building the new business
What is the economic cost of the time he contributes to the new business? A) $25,000 per year
B) zero
C) $70,000 per year
D) $45,000 per year
D
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Answer the next question using the following budget information for a hypothetical economy. All data are in billions of dollars. Government SpendingTax RevenuesGDPYear 1$800$825$4,000Year 28508504,200Year 39008754,350Year 49509004,500Year 51,0009254,600In which year is there a budget surplus?
A. Year 1 B. Year 2 C. Year 4 D. Year 5
The prisoners' dilemma is a tool of social analysis, and it shows why
A) individuals sometimes behave in ways inconsistent with their own best interest. B) judges sometimes hand down sentences heavier or lighter than the law recommends. C) people who break the law and are caught are behaving irrationally. D) people who break the law and are caught are behaving rationally. E) societies sometimes produce situations no member of the society wants.
The cost of reducing unemployment more rapidly by expansionary fiscal and monetary policies is a permanently higher inflation rate.
Answer the following statement true (T) or false (F)
Appendix: An incentive-compatible mechanism for revealing true willingness to pay in a private value auction is
a. impossible b. a Dutch auction c. a second-highest sealed bid auction d. a sequential auction with open bidding e. a discriminatory price all-or-nothing auction.