Which of the following examples shows the problem of using physical units as the measure of total economic activity?
a. Milk is measured by gallons; milk is paid for with dollars.
b. Milk is measured by gallons; train travel is measured by miles.
c. A gallon of milk weighs more than a gallon of water.
d. A plane covers more mph than a train does.
b. Milk is measured by gallons; train travel is measured by miles.
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The amount of output that a firm decides to sell has no effect on the market price in a competitive industry because
A) the market price is determined (through regulation) by the government B) the firm supplies a different good than its rivals C) the firm's output is a small fraction of the entire industry's output D) the short run market price is determined solely by the firm's technology E) the demand curve for the industry's output is downward sloping
If you were in the donut-making business, which of the following would most likely not be an explicit cost?
a. salaries b. sales taxes c. utilities, such as gas and electricity d. insurance e. the time you put into running the business