Gomer decides to spend an hour playing basketball rather than studying. His opportunity cost is:
a. nothing, because he enjoys playing basketball more than studying.
b. the increase in skill he obtains from playing basketball for that hour.
c. the benefit to his grades from studying for an hour.
d. nothing, because he had a free pass into the sports complex to play basketball.
c. the benefit to his grades from studying for an hour.
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Assuming convex producer choice sets, the (marginal) technical rate of substitution is equal (in absolute value) to the ratio of input prices at any profit maximizing production plan.
Answer the following statement true (T) or false (F)
An example of rent-seeking behavior would be:
a. streamlining production processes. b. lobbying legislators in charge of drafting business legislation. c. engaging in price discrimination. d. keeping prices below the profit maximizing level.
Suppose that in 2016, all prices in the economy double and that all wages and salaries also double. In 2016 you
A) are no better off or worse off than you were in 2015 as the purchasing power of your salary has remained the same. B) are better off than you were in 2015 as your salary is higher than it was in 2015 and you can now buy more goods and services. C) are worse off than you were in 2015 as you can no longer afford to buy as many goods and services. D) cannot determine whether you are better off or worse off than you were in 2015, because the purchasing power of your salary cannot be determined.
Average real wages have not risen significantly since approximately 1973.
Answer the following statement true (T) or false (F)