When a teacher in a private school points out to her high school principal that since there are empty seats in all classrooms, the cost of additional students is really zero, she is using the
a. law of comparative advantage.
b. principle of marginal analysis.
c. theory of externalities.
d. notion of the cost decreases of the service sector.
e. concept of opportunity cost.
b
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It has been suggested that in order to protect U.S. jobs we need to restrict foreign competition by restricting imports
A) This is a sound economic statement since the U.S. will still export protecting U.S. jobs. B) This is a sound economic statement since U.S. firms will have to increase output to make up for the lack of imports leading to increase employment in the U.S. C) This is not a sound economic statement since employment in the U.S. does not depend on imports and exports. D) This is not a sound economic statement since import restrictions lead to a reduction in employment in the export industries of the U.S.
Inflation affects borrowers and lenders differently. After signing a contract with a fixed nominal interest rate, it can be expected that
a. borrowers will hope that prices fall. b. lenders will hope that prices rise. c. lenders will hope that the purchasing power of money will fall. d. borrowers will hope that prices rise.