Candice is planning her activities for a hot summer day. She would like to go to the local swimming pool and see the latest blockbuster movie, but because she can only get tickets to the movie for the same time that the pool is open she can only choose one activity. This illustrates the basic principle that
a. people respond to incentives.
b. rational people think at the margin.
c. people face tradeoffs.
d. improvements in efficiency sometimes come at the expense of equality.
c
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Long-run economic rent or profit do not exist for fixed factors like land because
A) bidding drives up the price of the factor until no economic rent exists. B) there is no market for such factors. C) these factors have L-shaped isoquants. D) these factors will earn economic profits.
Preempting demand, gaining volume cost advantages, building the brand, and establishing a long-term competitive advantage are associated with
What will be an ideal response?
Which of the following is a positive economic statement?
A. Government must maintain the current level of defense spending to keep the nation safe B. The minimum wage should be increased to give people a decent wage C. Americans should buy American products in order to boost the national economy D. Stock prices rose to a new record last month for the fourth month in a row
Who developed a growth model that suggested new products unleash a "gale of creative destruction" that drives old products out of the market?
A. Alan Greenspan B. Joseph Schumpeter C. Ben Bernanke D. Adam Smith