A bulldozer used by a construction firm is known as a
a. capital good.
b. consumer good.
c. free good.
d. public good.
a. capital good.
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If Safeway reduced its grocery prices below cost in a particular metropolitan area and kept them there until all other grocery stores in the area had been forced into bankruptcy, Walmart would almost certainly sustain huge net losses
A) in the short run and the long run because grocery stores would reappear quickly when Walmart subsequently set high prices. B) in the short run but not in the long run because it could charge very high prices afterward. C) in the short run but not in the long run because the policy would lower Walmart's costs of buying from suppliers. D) only if the government enforced the antitrust laws in a fair and even-handed way.
According to the principle of rational choice, a consumer should spend money on those goods which provide the most marginal utility per dollar.
Answer the following statement true (T) or false (F)
The ________ curve is vertical
A) short-run aggregate supply B) short-run aggregate demand C) long-run aggregate supply D) long-run aggregate demand
An investor wants to invest in the oil industry, but does not know which major companies will produce the greatest return. As a result, the investor buys shares in several oil companies. By buying several companies to reduce risk, the investor is seeking to reduce:
A. Systemic risk B. The risk premium C. Idiosyncratic risk D. Nondiversifiable risk