The opportunity cost of investment in capital is forgone present consumption because
A. capital increases the productivity of labor.
B. resources are scarce.
C. capital is an intangible good.
D. capital takes a long time to produce.
Answer: B
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Which of the following observations is true?
A. In the long run, more costs become variable. B. Fixed costs cannot be completely varied if the time period is sufficiently long. C. Fixed costs arise when some types of inputs can be bought only in big batches. D. Variable costs arise when inputs have a large productive capacity.
Adverse selection problems in health insurance are reduced by all of the following except: a. requiring physical exams
b. requiring patients to pay higher deductibles. c. insuring entire groups. d. by limiting the period of open enrollment in health insurance plans.
The government is involved in the U.S. economy for all of the following reasons EXCEPT to
a. promote and encourage competition. b. prevent monopolies that deny the public the benefits of competition. c. regulate industries in which a monopoly is in the public interest. d. promote the development of market externalities.
Refer to the graph shown.
If suppliers can reduce output from M to L, the suppliers excluded from the market will lose the producer surplus shown by area:
A. F. B. D. C. E and F. D. E.