The table below shows four alternative techniques for assembling a car. The cost of labor is $20 per hour, and the cost of capital is $10 per hour. Which of the four techniques for assembling a car is economically efficient?
A) T-1
B) T-2
C) T-3
D) T-4
D
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An individual has an absolute advantage in producing pizzas if that individual:
A. charges the lowest price for pizzas. B. has a higher opportunity cost of producing pizzas than anyone else. C. has a lower opportunity cost of producing pizzas than anyone else. D. can produce more pizzas in a given amount of time than anyone else.
Samia makes $8,000 a month. Samia spends $2,500 on rent and related household expenses, $500 on food, $200 on clothes, $500 on entertainment and $600 on transportation. She always keeps $200 for things like the car breaking down
$3,500 is invested in the stock market. Which of the following statements is TRUE? A) The transactions demand for money is $4,300, the precautionary demand is $200 and the asset demand is $0. B) The transactions demand for money is $4,300, the precautionary demand is $200 and the asset demand is $3,500. C) The transactions demand for money is $3,500, the precautionary demand is $200 and the asset demand is $4,300. D) The transactions demand for money is $4,300, the precautionary demand is $3,500 and the asset demand is $200.
This chapter has spent a lot of time dealing with issues of wealth and consumption. One suggestion has been to have a tax on wealth. What are some of the benefits of this proposal?
What will be an ideal response?
Suppose that the current money market equilibrium features an interest rate of 5 percent and a quantity of $2 trillion. If the Fed raises the discount rate, which of the following ismostlikely to be the new money market equilibrium?
a. An interest rate of 6 percent and a quantity of $1.5 trillion. b. An interest rate of 5 percent and a quantity of $2 trillion. c. An interest rate of 4 percent and a quantity of $2.5 trillion. d. None of the above.