The theories of economics, with surprisingly few exceptions, are extensions of which of the following assumptions about people?
A) People will do whatever earns them the most money.
B) People will do whatever helps them to be "one up" on others.
C) People will do whatever makes them popular.
D) People will do whatever most effectively promotes the common good.
E) People will do whatever yields them the largest net benefit.
E
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An increase in economic rent is simply a transfer from the buyer to the seller without any change in quantity. Identify the underlying assumption
a. Quantity supplied remains unchanged even when economic rent increases. b. Quantity supplied is positively related to economic rent. c. The relation between quantity supplied and economic rent is indeterminate for nonrenewable resources. d. Bargaining power of buyers is greater than sellers. e. Consumer surplus is a positive function of economic rent.
Individuals, firms, and government agencies deplete clean water and clean air because
A. they are excludable resources. B. the cost of doing so has no impact on the environment. C. they are nondepletable. D. there is little to no charge in accessing these resources.
Classical economists believed that in the long run the economy would fix itself, thus there was no need for any government action. Which of the following economists disagreed, saying, "In the long run, we are all dead."
A. Milton Friedman B. Arthur Laffer C. George Lucas D. John Maynard Keynes
A country is said to have an absolute advantage in the production of a good when:
A. its opportunity cost of producing the good is lower than another country. B. it can produce the good using fewer resources than another country. C. it specializes in the production of the good. D. it has a favorable exchange rate compared to another country's currency.