8. Labor typical accounts for _____percent of production costs. a. 80 b. 90 c. 1
ID: 1165107 • Letter: 8
Question
8. Labor typical accounts for _____percent of production costs.
a. 80
b. 90
c. 100
d. 70
e. 50
13. Beneficial shocks to the economy provide _______.
a. abundant harvests
b. discoveries of natural resources
c. technological breakthroughs
d. sudden changes in the economic system such as tax cuts
e. all of the above
14. The formula for disposable income is ________.
a. DI = C + S
b. DI = C + T
c. QT = X + Y (C + S)
d. A – G
e. none of the above
15. ______ is the final purchase of goods and services by consumers.
a. death wish
b. contortion
c. consumption
d. energy
e. none of the above
16. According to the graph, _______.
a. consumption is on the vertical axis and disposable income on the horizontal axis.
b. consumption is on the horizontal axis and disposable income on the vertical axis.
c. disposable income remains constant
d. a and c only
e. disposable income has declined
17. Consumption function reflects a _______.
a. negative slope
b. problem in the economy
c. positive slope
d. regulation barrier
e. none of the above
18. Investment reflects ________.
a. new physical capital
b. new housing
c. net increases to inventories
d. 16 percent of GDP
e. all of the above
19. When market interest rate increases ______.
a. investment decreases
b. investment increases
c. investment remains the same
d. investment is only made by private institutions
e. none of the above
20. Economy’s standard of living increases with_________.
a. an increase in the amount and quality of resources
b. better technology and know-how
c. improvement in the rules of the game that facilitate production and exchange
d. a, b, and c only
e. none of the above
21. A production possibilities frontier reflects ______.
a. consumer goods and capital goods
b. consumer news and capital news
c. producer goods and capital supply
d. a shift in the demand curve
e. none of the above
22. Lofty economic goals are often ________ on a PPF.
a. attainable
b. unattainable
c. discriminatory
d. contractual
e. negative
23. Economic growth occurs when _____.
a. investment occurs
b. jobs are sent overseas
c. women and minorities are kept out of the workplace
d. undocumented immigrants are sent back to their home country
e. none of the above
24. An economy that produces more capital goods will _______.
a. grow less
b. grow more
c. remain the same
d. hinder growth
e. none of the above
25. The process that transforms resources into goods and services is called ________.
a. supply
b. reaction
c. median income
d. production
e. consumption
26. The ratio of a specific measure of output to a specific measure of input is called ________.
a. productivity
b. variance
c. a histogram
d. contraction
e. an inverse variable
27. Labor productivity is _______.
a. a flow variable
b. input per unit of labor
c. output per unit of labor
d. dependent on private investment
e. b and c only
28. In poorer countries _________.
a. labor is cheap, capital is dear
b. producers substitute labor for capital
c. consumption is exponential
d. a and b only
e. none of the above
Explanation / Answer
14. a. DI = C + S
Disposable income = Consumption + Saving
Disposable income is the income which is left after paying taxes. Money left for consumption and saving is the disposable income.
15. c. consumption
Final purchase of goods and services by the consumer is called consumption expenditure.
16. Graph is missing.
17. c. positive slope
Consumption function is positively sloped because increase in income causes increase in consumption expenditure of people.
18. e. all of the above
Investment means money invested in purchasing raw material, house, new infrastructure, etc.
19. a. investment decreases
Increase in market interest rate induces people to save their money in banks rather than investing it.
20. d. a, b, and c only
Standard of living increases when there is increase in resources, technology improves, better methods to make exchange easier.
21. a. consumer goods and capital goods
PPF shows consumption bundle of consumer and capital goods.
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