Economists refer to land, labor, and capital as the factors of production. Land in this context refers to natural resources. Given this definition, which is not land?
a. water
b. oil
c. forests
d. highways
Ans: d. highways
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What are the two basic types of economic systems?
What will be an ideal response?
The fact that some resource prices are fixed by contracts help explain why firms:
a. increase output in the short run when the price level increases b. keep production levels constant in the short run when the price level decreases. c. sell output in the short run at fixed prices. d. increase output in the long run when the price level increases. e. decrease production when nominal wages fall in the long run.
Figure 4-19
After a strike against the Financial News in London began, the number of copies of the competing Broad Street Journal sold in England increased dramatically, yet there was no increase in price. Which supply and demand graph in Figure 4-19 represents the situation for the Broad Street Journal before the strike started?
a.
1
b.
2
c.
3
d.
4
If cream cheese and bagels are complements, then an increase in the price of cream cheese will __________ the demand for bagels.
a) increase b) not change c) increase or decrease d) decrease