The theory of _______ holds that people will use all information available to them to form the most accurate possible expectations about the future.
a. adaptive expectations
b. rational expectations
c. Keynesian economics
d. Neoclassical economics
b. rational expectations
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How does the income approach measure GDP?
What will be an ideal response?
A monopolist is willing to lose some customers by charging higher prices, since this results in higher profits.
Answer the following statement true (T) or false (F)
The optimum quantity of an input occurs when
a. diminishing returns set in. b. marginal revenue product equals input price. c. marginal physical product equals input price. d. marginal revenue product equals output price.
In a typical short-run production function, before diminishing returns set in, the slope of the total product curve
A. is increasing. B. is decreasing. C. rises and then falls before diminishing returns sets in. D. falls and then rises before diminishing returns sets in.