Assume an individual is considering opening a new car dealership in a medium-sized metropolitan area (population = 200,000 )
Provide a list of economic variables you would recommend that the person consider in making his decision whether to open the business, and explain your rationale for including each variable.
At a minimum, it would seem that the decision maker should consider 1 ) the current number of dealerships in the area, 2 ) the types and quantities of vehicles that consumers in the local economy currently purchase, 3 ) the income in the local economy, 4 ) the level of unemployment both locally and nationally, 5 ) projected trends in unemployment, and 6 ) possible policy changes that might be undertaken by the central bank or the federal government.
1, 2 and 3 would give the decision maker a sense of how strong the market for his product might be. Information on unemployment in the local economy would provide useful information in this regard as well. 5 and 6 would provide information on what the decision maker could expect in the coming months, especially regarding whether demand for his product is likely to grow or decline.
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A subjective analysis of "what should be" in the economy is referred to as
A) positive economics. B) normative economics. C) command economics. D) implicit economics.
Public provision
A) is the production of a good by the government by giving funds to private producers. B) lowers the marginal cost of producing the good. C) means the good is produced by a public authority that receives the most of its revenue from the government. D) Both answers A and B are correct. E) Both answers B and C are correct.
The above figure shows the market for crude oil. If the oil exploration firms convince the government to set a minimum price of $4 per barrel, then
A) 100 barrels of crude oil will be sold at $4. B) zero barrels of crude oil will be sold. C) zero barrels of crude oil will be demanded. D) None of the above.
Explain how the short-run industry supply curve for a perfectly competitive market is derived.
What will be an ideal response?