Refer to the graph shown. If market price decreases from $7.00 per unit to $6.00 per unit, a profit-maximizing perfectly competitive firm will:
A. decrease output from 850 to 750.
B. produce 850 units of output.
C. increase output from 650 to 750.
D. continue to produce 850 units.
Answer: A
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The precise terms of each futures contract are
A) negotiated by the long and the short. B) set by the short position. C) set by the long position. D) established by the exchange on which the trade takes place.
If Camila's income rises by 20 percent, and, as a result, she purchases 40 percent more dresses, her income elasticity for dresses is
a. 0.5. b. 1.0. c. 2.0. d. Not enough information is given to answer this question.
Suppose there was a debate regarding how to spend $1 billion in newly found revenues in the budget. Suppose the most liberal Democrat suggests an increase to Food Stamp (SNAP) allotments. Suppose the most conservative Republican suggests an increase in defense spending. The Republican says that, on average, military spending does the most good, so more is better. The Democrat is arguing that the extra food purchased by the extra spending will increase well-being the most. What is going on here?
A. Only the Democrat is using marginal analysis. B. Both are employing marginal analysis, just from different perspectives. C. Neither are using marginal analysis. D. Only the Republican is using marginal analysis.
An increase in the foreign real interest rate would cause the domestic country's net exports to ________ and cause the domestic country's IS curve to ________
A) rise; shift up B) rise; shift down C) fall; shift up D) fall; shift down