Assume toys are produced using only labor and wood. Which of the following best describes the cost of producing toys?
a. The number of dollars that the laborer spends to purchase the wood.
b. The amounts of labor and wood used in the production process.
c. The alternative uses that could be found for the labor and wood.
d. The monetary value of the labor and wood used.
c. The alternative uses that could be found for the labor and wood.
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When Maria deposits $100 in currency in her checkable deposit at Bank of America, the immediate effect is that the quantity of M1 ________ because ________
A) changes only if Bank of America has excess reserves; if the bank does not have excess reserves, the overall effect to M1 is too small to notice B) decreases; checkable deposits are included in M2 but are not included in M1 C) does not change; both currency and checkable deposits are included in M1 D) changes, but the direction of the change cannot be determined; the direction of the change depends on what Bank of America does with the deposit E) increases; both currency and checkable deposits are included in M1
When an input represents a small proportion of a firm's total costs, then
A) demand for the input will tend to be less elastic. B) the input demand will vary significantly with a change in input price. C) the usage of the input cannot be varied in the production function. D) output demand will be highly elastic.
An external BENEFIT occurs when
A. some of the benefits derived from the production or consumption of some good or service are enjoyed by a third party. B. the production or consumption of some good or service inflicts costs on a third party without compensation. C. private costs exceed social costs. D. private benefits exceed private benefits.
The short run is a period of time during which _____
Fill in the blank(s) with the appropriate word(s).