Given the production function and total cost function shown in Chapter 4, as production increases, total fixed costs
A. decrease constantly.
B. increase constantly.
C. remain constant.
D. increase for a while and then decrease.
Answer: C
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The use of psychological incentives to solve commitment problems would be least effective in games played:
A. once between family members. B. repeatedly between strangers. C. once between strangers. D. repeatedly between family members.
The disposable income component of aggregate demand is equal to:
a. income before taxes. b. income after taxes. c. operating income. d. investment income.
If Sally Smith creates VCU1 by playing an online game, the effect is to cause the nation's:
a. Monetary base to fall. b. M2 money supply to fall. c. M2 money multiplier to fall. d. Monetary base to remain the same.
Related to the Economics in Practice on page 26: Which one of the following occurs when an individual enters the paid work force?
A. The opportunity cost of time for housework decreases, because as more people enter the work force, businesses have greater incentives to develop innovations that make housework more efficient. B. The opportunity cost of time for housework increases, because time spent on housework could be spent on money-earning activities. C. The opportunity cost of time for housework increases, because money earned at a job can allow individuals to pay someone to do household chores that the individuals used to do themselves. D. The opportunity cost of time for housework decreases, because increased earning power makes individuals less likely to do their own housework.