A game show host who gave up his job as a teacher brags about his salary, saying "the rest is pure gravy." Here, "the rest" refers to
a. opportunity cost
b. implicit cost
c. explicit cost
d. the height of his labor supply curve
e. economic rent
E
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The term human capital refers to
A) labor resources used to make capital equipment. B) buildings and machinery. C) people's knowledge and skill. D) entrepreneurship and risk-taking.
The price elasticity of demand between milk and soda is likely to be:
A. negative, because the goods are complements. B. positive, because the goods are complements. C. negative, because the goods are substitutes. D. positive, because the goods are substitutes.
Bank examinations by the FDIC help reduce the ________ problem, by preventing bank managers from allocating funds already obtained from depositors to non-creditworthy loans.
A. moral hazard B. adverse selection C. contrary selection D. principled hazard
Basket of goods A is on an indifference curve that lies further from the origin than basket B. From this we know that
A) the prices of the goods in A are more than the prices of the goods in B. B) the satisfaction from consuming A is more than the satisfaction from consuming B. C) the marginal utility from consuming A is more than the marginal utility from consuming B. D) all other consumers would also rank B above A.