When deciding whether to buy a second car, the economic way of thinking indicates that the purchaser should compare
a. the benefits expected from two cars with the cost of both.
b. the additional benefits expected from a second car with the cost of the two cars.
c. the dollar cost of the two cars with the potential income that the cars will generate.
d. the additional benefits of the second car with the additional cost of the second car.
d. the additional benefits of the second car with the additional cost of the second car.
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When an asset is traded for goods and services it is serving the function of a ________
A) store of value B) loanable fund C) unit of account D) medium of exchange
Christina Romer's criticism of the belief that business cycles had moderated since World War II depended on the fact that
A) estimates of the timing of business cycles since World War II had been inaccurate. B) misuse of historical data had caused economists to understate the size of cyclical fluctuations in the post-World War II era. C) economists had ignored the roles of the government and international trade in mitigating economic fluctuations prior to World War II. D) economists had left out important components of GDP, such as wholesale and retail distribution, transportation, and services, in their pre-World War II estimates.
Refer to the graph shown. If market price decreases from $7.00 per unit to $6.00 per unit, a profit-maximizing perfectly competitive firm will:
A. decrease output from 850 to 750. B. produce 850 units of output. C. increase output from 650 to 750. D. continue to produce 850 units.
A depreciation of the dollar will
A. discourage foreigners from buying U.S. goods. B. encourage Americans to invest in foreign assets. C. increase the amounts of U.S. dollars demanded by foreigners. D. throw the U.S. economy into a recession.