Which of the following does not explain why consumers buy products that many other consumers are already buying?
A) network externalities
B) the satisfaction people derive by being viewed as "fashionable"
C) cost-effective way to gather information about a product
D) differences in tastes and preferences
Answer: D
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What is the major cost of slowing down an ongoing inflation?
a. Output must rise above potential. b. The Fed must sell bonds at lower prices than those at which the bonds were purchased. c. Output must fall below potential. d. The Fed must purchase bonds from the public. e. The Fed must lend additional money to member banks at below-market interest rates.
When we focus on labor as an input in the production process, we typically draw the production function by measuring the
a. quantity of labor on the horizontal axis and the quantity of output on the vertical axis. b. quantity of labor on the horizontal axis and the marginal product of labor on the vertical axis. c. quantity of labor on the horizontal axis and the value of the marginal product of labor on the vertical axis. d. value of the marginal product of labor on the horizontal axis and the quantity of output on the vertical axis.
The figure above shows the demand and cost curves facing a price-setting firm. The profit-maximizing (or loss-minimizing) level of output is
A. 100 B. 200 C. 300 D. 400 E. 450
___________ than would be the case if all firms had identical products and prices.
a. flatter b. steeper c. farther to the right d. less elastic