What is a "social cost" of production?
A) the cost of the natural resources used up in production
B) the total costs of producing a product, both implicit and explicit costs
C) the sum of all costs to individuals in society, regardless of whether the costs are borne by those who produce the products or consume the product
D) the cost of the environmental damage created by production
Answer: C
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Elisa Kilhafer, a housewife in St. Louis, Missouri, who claims on a Bureau of Labor Statistics (BLS) survey that she is neither gainfully employed nor looking for work, is, according to the BLS,
a. considered retired b. counted as unemployed c. considered reemployable d. counted as a member of the labor force e. not counted as a member of the labor force
Suppose the equilibrium price of a tube of toothpaste is $2, and the government imposes a price floor of $3 per tube. As a result of the price floor,
a. quantity demanded decreases. b. quantity supplied increases. c. there is a surplus. d. All of the above are correct.
If you were to start your own business, your implicit costs would include the:
A. opportunity cost of the time you spend working at the business. B. interest that you pay on your business loans. C. profit you earn over and above your normal profit. D. rent that you have paid in advance for the use of a building.
Sheila and Jim live in an island where they are the only two workers. Sheila can either catch 10 fish or gather 40 pounds of berries each day, and Jim can either catch 8 fish or gather 24 pounds of berries each day. Both of them work 200 days per year. At current world prices 1 fish trades for 3.5 pounds of berries. In a closed economy, who has the comparative advantage in catching fish?
A. Sheila B. Sheila and Jim C. Jim D. Neither of them