Which of the following is the most valid expression of a theory of under consumption as a cause of business cycles?
a. capital goods production encroaches on consumer goods production
b. income equals production, but not all income is used for current purchasing power
c. people want more goods than the economy is capable of producing; therefore, they must cut their consumption expectations
d. the economy provides insufficient purchasing power to buy back the goods it produces
b. income equals production, but not all income is used for current purchasing power
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Monopolies arise when there are
A) many substitutes but there are no barriers to entry. B) no close substitutes and there are no barriers to entry. C) no close substitutes and there are barriers to entry. D) many substitutes and there barriers to entry. E) None of the above answers are correct because the existence of a monopoly has nothing to do with the presence or absence of barriers to entry.
Fast Stop, a gasoline and grocery quick mart, charges $3 for one hot dog and $5 for two hot dogs. This is an example of ________.
A) an all-or-nothing offer B) third-degree price discrimination C) second-degree price discrimination D) two-part pricing
What is the opportunity cost of 1 ton of apples for the nations of Argentina and Brazil, respectively?
A. 4 tons of oranges and 2 tons of oranges
B. 2.5 tons of oranges and .4 tons of oranges
C. .25 tons of oranges and .5 tons of oranges
D. 2 tons of oranges and 4 tons of oranges
The market in which households supply their savings to firms that demand funds in order to buy capital goods is the ________ market.
A. investment B. money C. capital D. savings