The difference between the cost of production on a piece of land less the cost of production on marginal land is called
A. usury.
B. profit.
C. rent.
D. interest.
Answer: C
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Suppose that firms find that their inventories are less than planned. In this case, what is the initial relationship between aggregate planned expenditure and real GDP? Using the aggregate expenditure model, what adjustments, if any, take place?
What will be an ideal response?
How does the price of the final good for which labor is used to produce affect the demand for labor?
What will be an ideal response?
Suppose, in the United States, each farmer is given a federal agricultural subsidy worth $30,000 . What will be the effect of such subsidy?
a. They discourage domestic agricultural production. b. They allow U.S. farmers to sell their products for lower prices in foreign markets. c. They give foreign producers an unfair cost advantage. d. They increase the amount of agricultural imports into the United States. e. The price of the primary products decline in the U.S. market.
Predatory pricing occurs when
a. firms collude to set prices. Economists are certain this practice is profitable. b. firms collude to set prices. Economists are skeptical that this practice is profitable. c. A monopolist decreases its prices to maintain its monopoly. Economists are certain this practice is profitable. d. A monopolist decreases its prices to maintain its monopoly. Economists are skeptical that this practice is profitable.