In reality, firms may seek to maximize
a. sales.
b. profits.
c. market share.
d. All of the above can be correct, depending upon management, owners, and other factors.
d
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The figure above shows the market for college education in the United States. If there is no external benefit from a college education and the government does not intervene in the market, then the equilibrium tuition of college education is
A) $13,000. B) $16,000. C) $20,000. D) $7,000. E) None of the above answers is correct.
If a monopsony must negotiate with a union, then the wage will probably be
A) more than the value of marginal product. B) more than the marginal cost of labor. C) the same as if there had been no union. D) more than what it would have been without a union but not more than the value of marginal product.
Using Figure 1 above, if the aggregate demand curve shifts from AD3 to AD2 the result in the long run would be:
A. P1 and Y2. B. P2 and Y1. C. P3 and Y1. D. P3 and Y2.
In the Keynesian model, whenever planned investment is greater than planned saving
A. the amount of planned investment will decrease, and real GDP will remain unchanged. B. there will be an unplanned inventory decrease, and GDP will eventually increase. C. the amount of planned investment will decrease, and real GDP will decrease. D. there will be an unplanned inventory increase, and GDP will eventually decrease.