If one fails to account for implicit costs in decision making, then applying the cost-benefit rule will be flawed because:
A. the costs will be understated.
B. the benefits will be overstated.
C. the benefits will be understated.
D. the costs will be overstated.
Answer: A
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Which of the following best explains the cause of the change in the unemployment rate at the end of a recession?
A) Firms rapidly hire new workers at the first sign of an increase in demand for their goods. B) Firms are hesitant to rehire laid-off workers as they continue to operate below capacity. C) Discouraged workers begin to return to the labor force, causing the unemployment rate to fall. D) Frictionally unemployed workers find it easier to gain employment, lowering the natural rate of unemployment.
The most important way in which inefficiency occurs is
a. producing more military goods instead of civilian goods. b. limiting economic growth by limiting capital spending. c. unemployment of labor and other resources. d. producing outside the production possibilities frontier. e. All of the above are correct.