A fundamental aspect of economics is to
A) ensure that every firm makes a profit.
B) analyze how choices are made.
C) satisfy all our wants.
D) make sure that we always have sufficient resources.
Answer: B
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If the firm hires 5 workers, the average cost equals
a. $10 b. $1000 c. $80 d. Need more information
Two perfectly competitive firms, Firm A and Firm B, both face random demand and have the same expected marginal revenue, as illustrated in the figure below. For which firm would a forecast of demand be more valuable?
A) Firm A
B) Firm B
C) The value for each firm is the same because the expected marginal revenue and marginal cost are the same.
D) A forecast is more valuable for Firm A if the demand will be high and more valuable for Firm B if the demand will be low.
Assume that the central bank increases the reserve requirement. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the real risk-free interest rate and real GDP in the context of the Three-Sector-Model?
a. The real risk-free interest rate rises, and real GDP remains the same. b. The real risk-free interest rate rises, and real GDP falls. c. The real risk-free interest rate and real GDP remain the same. d. The real risk-free interest rate falls, and real GDP rises. e. There is not enough information to determine what happens to these two macroeconomic variables.
Say Anna's utility function was given by UA = (MA) (MM), where MA is Anna's wealth and MM is Marie's wealth. Initially, Anna has 160 units of wealth and Marie has 40. When Anna maximizes her utility level is equal to
A. 100. B. 5,000. C. 200. D. 10,000.