Refer to the graphs shown, which depict a perfectly competitive market and firm. If market demand increases from D0 to D1, the firm will:
A. lower the price it charges.
B. earn positive economic profit in the long run.
C. earn negative economic profit in the short run.
D. earn positive economic profit in the short run.
Answer: D
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Answer the following statement(s) true (T) or false (F)
1. An economic model is robust if it provides results that are testable and verifiable. 2. An easy, but not very insightful, possible explanation for apparently irrational behavior is that it is rational for a people with a taste for the behavior. 3. Most economic explanations can be reduced to the idea that human behavior is primarily a matter of taste. 4. Since economists assume that people act in their own self-interest, economic analysis does not apply to situations where people behave altruistically. 5. A model that is said to be robust is one that has many details and closely mimics reality.
Which of the following is one of the balance of payments accounts?
A) government expenditure account B) capital and financial account C) reserve account D) net borrowing account
Refer to Figure 17-3. In Panel A, at low wages (segment i)
A) labor suppliers demand more leisure as wages increase. B) the substitution effect outweighs the income effect. C) the income effect outweighs the substitution effect. D) the substitution effect offsets the income effect.
In the one-period model, what do we assume about household preferences?
A) Households prefer more to less. B) Households like money. C) Households dislike taxes. D) Households care about others.