If unemployment and inflation always move in the same direction, then we can infer that business fluctuations are
A. from the demand side.
B. from the supply side.
C. from both the demand and supply side.
D. purely random events.
Answer: B
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Which of the following best characterizes the circular flow of income?
a. Households buy goods and services from businesses, and businesses sell goods and services to households. b. The government purchases resources from businesses and households and then sells goods and services to businesses and households. c. Businesses buy resources from the government, and households buy goods and services from businesses. d. Businesses buy resources from households, and households use their income to buy goods and services from businesses.
(Ref 9-6 Figure: Wireless Mouse Market) Refer to Figure 9-6: Wireless Mouse Market. Calculate the change in producer surplus when the price increases from $10 to $15.
A. $250
B. $1,000
C. $1,125
D. $625
The payoff matrix below shows the daily profit for two firms, Row Restaurant and Column Cafe, for two different strategies, publishing coupons in the student paper and not publishing coupons in the student paper.
The payoffs of this game are such that:
A. an agreement not to publish coupons would be easy to maintain because neither firm has an incentive to defect. B. both firms would benefit from a law that made publishing coupons illegal. C. if Row Restaurant expects Column Cafe to choose its dominant strategy, then Row Restaurant should choose its dominated strategy. D. profit at each firm is higher when they both follow their dominant strategy than when they both follow their dominated strategy.
A straight-line production possibilities curve has
A. a constant opportunity cost between the two goods. B. an increasing opportunity cost between the two goods. C. a decreasing opportunity cost between the two goods. D. no opportunity cost between the two goods.