According to data on GDP growth between 1980 and 2009, which of the following statements is true?
What will be an ideal response?
Many poor nations grew more rapidly than wealthy nations, while others continued to stagnate.
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If you own a building and you decide to use that building to open a restaurant,
A. there are no sunk costs involved in this decision. B. there is no opportunity cost of using this building for a restaurant because you own it. C. the only cost relevant to this decision is the price you paid for the building. D. there is an opportunity cost of using this building for a restaurant because it could have been used in other ways.
Economists assume that business firms have many goals, and profit maximization is just one of them.
Answer the following statement true (T) or false (F)
Tom, a math major, examines Jane's economics class notes and observes that when price-taking firms earn economic profit, they do not seem to produce a quantity that minimizes their costs. Is he correct? Is there significance to this observation?
The ______ arises when a price changes because consumers have an incentive to consume less of the good with a relatively higher price and more of the good with a relatively lower price.
a. income effect b. substitution effect c. backward-bending supply curve d. preferences effect