A factor market is any place or process where
A. Finished services are bought and sold.
B. Land, labor, or capital is bought and sold.
C. Finished goods are bought and sold.
D. None of the choices are correct.
Answer: B
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The circular flow of income involves the idea that
A) the seller of a good receives exactly the same amount as the buyer spends. B) in every economic exchange one party takes advantage of the other party. C) the seller of a good receives more than the buyer spends. D) the seller of a good receives less than the buyer spends.
The less sensitive quantity demanded is to a change in price, the
A) smaller a change in price must be to induce a certain change in quantity demanded. B) greater the absolute price elasticity of demand. C) smaller the absolute price elasticity of demand. D) closer the absolute price elasticity of demand is to one.
If MRP < MLC, the firm
a. is employing the optimal quantity of workers b. should decrease the quantity of labor it employs c. should lower the wage rate d. should increase the quantity of labor it employs e. should raise the wage rate
The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment. B. exogenous spending. C. recessionary gaps. D. expansionary gaps.