In the production of goods and services, trade-offs exist because
A) not all production is efficient.
B) society has only a limited amount of productive resources.
C) we have abundant resources to choose from.
D) human wants and needs are limited at a particular point in time.
Answer: B
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When the Fed increases the money supply,
A) the interest rate rises and this stimulates consumption spending. B) the interest rate falls and this stimulates investment spending. C) the interest rate rises and this stimulates investment spending. D) people spend less because they have more money.
As long as scarcity exists,
a. product prices play no role in utility maximization b. income plays no role in utility maximization c. income and product prices must both be considered in utility maximization d. consumers maximize utility by consuming all products until their marginal utility is zero e. product prices will be zero
A wage offer that is above the market wage, intended to avoid the adverse selection problem, is called a(n)
a. efficiency wage b. union wage c. selection wage d. spurious wage e. opportunity cost wage
For most firms in the economy, the largest part of factor costs is the cost of
a. labor. b. capital. c. property and machinery. d. land and natural resources.