Every firm that has the ability to affect the price of the good or service it sells will
A) have a perfectly elastic demand curve.
B) have a marginal revenue curve that lies below its demand curve.
C) earn a short-run profit but break even in the long run.
D) shut down in the short run.
Answer: B
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According to classical growth theory, people earn only a subsistence real income because of growth in
A) technology. B) employment. C) population. D) labor productivity. E) capital.
Cindy discovers that when she goes to the beach, she does not have to bring her radio. She can put her blanket near someone who has a radio and listen all day (without having to carry her radio, get sand in her speakers, or buy new batteries). She's delighted. This is an example of
a. private property abuse b. an externality cost to the person who has the radio c. a negative externality enjoyed by Cindy d. a positive externality enjoyed by Cindy e. a public good
If the minimum reserve ratio is 20 percent, then $1 of reserves can support a maximum of $10 more in transactions deposits.
Answer the following statement true (T) or false (F)
When producers are hopeful about the economic business outlook, they often
A. decrease their inventory levels. B. decrease their purchase of new goods. C. increase their investment in capital goods. D. increase their investment in savings.