Corn is produced in a perfectly competitive market. The demand for ethanol increases. This will cause the individual corn farmer's marginal revenue to ________ and their profit-maximizing level of output to ________.
A. increase; increase
B. increase; decrease
C. decrease; increase
D. decrease; decrease
Answer: A
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The term investment, in the language of economists, refers to the purchases of stocks, bonds, and other financial instruments
a. True b. False
Keynesians believe that budgetary restraint should be used to cool an overheated economy.
Answer the following statement true (T) or false (F)
The textbook points out that rent controls have
A) benefited upper-income or existing tenants. B) had no effect on the market for housing. C) greatly benefited the homeless. D) attracted increases in low-income housing.
A consumer is maximizing utility when
A) the slope of the budget constraint has reached -1. B) diminishing marginal utility has set in. C) the slope of the budget constraint equals the marginal rate of substitution. D) the consumer has spent all of his income.