Refer to the graph shown. To maximize profit, the monopolistically competitive firm represented in this graph will produce:
A. Q1 and set price equal to P4.
B. Q1 and set price equal to P3.
C. Q2 and set price equal to P2.
D. Q1 and set price equal to P1.
Answer: A
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Paul Romer's theory on the importance of knowledge differs from traditional theory in that Romer
A) argues, that investment is not important in promoting growth, but that the acquisition of knowledge is the sole determinant of economic growth. B) argues that an investment-knowledge cycle allows a once-and-for-all increase in investment to permanently raise a country's growth rate, while traditional theory argues that a once-and-for-all increase in investment leads to a higher standard of living but not to a higher growth rate. C) argues, that an investment-knowledge cycle exists which requires that investment rates keep increasing or else growth rates will fall, while traditional theory argues that growth rates will not fall, although they will not increase either. D) emphasizes investment rates while traditional theory emphasizes the importance of knowledge as a factor of production.
Based on the assumptions in the Application, should Rory hire a gardener or cut the weeds himself?
A) He should hire the gardener because he would save $800. B) He should cut the weeds himself because he would save $1,000. C) He should hire the gardener because he would save $1,000. D) He should cut the weeds himself because he would save $200.
If a consumer buys less gasoline because gas prices increased by 100 percent, even though all other prices have also increased by 100 percent, then
A) the consumer is paying too close attention to changes in relative prices. B) wages and prices are too flexible. C) the consumer has been fooled by money illusion. D) inflation is not a problem in the economy.
The Nash Equilibrium outcome assures the maximum profit for firms.
Answer the following statement true (T) or false (F)