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According to the law of increasing opportunity costs,
A. The more one is willing to pay for resources, the smaller will be the possible level of production.
B. Increasing the production of a particular good will cause the price of the good to remain constant.
C. In order to produce additional units of a particular good, it is necessary for society to sacrifice increasingly larger amounts of alternative goods.
D. None of the choices are correct.
Suppose you bought a 2-year, 2%-coupon-rate, $100-face-value Treasury note at a market price of $98. The yield to maturity on this note is _________ Given the falling oil and other commodity prices we observe lately, inflation is expected to fall. Ho..
John is buying some wood from Michael at a price of $50. He needs to build warehouse to put them in. He has two options: (i) build a high quality warehouse at a cost of $100; or (ii) build a simple warehouse at a cost of $50. If there is no rule that..
Compute the regular expenditure multiplier also the net tax multiplier if the level of consumption increases from $80,000 to $92,000 as a result of change in income from $120,000 to $140,000.
Mr. Sansome withdrew &1000 from a savings account and invested it in common stock. At the end of 5 years, he sold the stock for $1207. In the savings account, he would have received an interest rate of 3%, compounded quarterly. He would like to compu..
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Assume that you are going to start a small business of your own. Describe the business and, utilizing the concepts of this unit and the earlier units, discuss: What costs you would incur;
Assume that the cost of producing ice cream is $1.20 per gallon. You estimate that you can sell 1,000 gallons per month. If you want to earn revenue of $2,500 per month, what price should you charge for a gallon of ice cream? Assume that your estimat..
The ratio of total productivity to the total quantity of a variable input being used in production is. In the long run all production inputs are variable. Decreasing returns to scale prevail when output increases by a proportion that is smaller than ..
An increase in nominal GDP accompanied by a decrease in real GDP: A. is impossible. B. implies that the price level in the economy fell. C. implies that the price level in the economy rose. D. implies that the price level in the economy remained the ..
Illustrate which of the three cases, if any, do you think that demand has increased more rapidly than supply. Explain your reasoning.
Assume an economy with a total population equal to 1. Individuals can only be employed or unemployed. Suppose this economy’s steady-state unemployment rate is 5%. We know that workers can lose their jobs and become unemployed with probability 4%. Wha..
The period of time that starts from the year the first costs are incurred for each alternative and ends in the last year costs are incurred for that alternative is referred to as:
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