Which of these goods are complements?
(A) Milk and cream
(B) Canoe and paddles
(C) Coffee and tea
(D) Contact lenses and glasses
Ans: (B) Canoe and paddles
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One method of setting price using the cost-plus method is to add
A) a given percentage of marginal cost to marginal cost of production. B) a given percentage of fixed cost to total fixed cost. C) a given percentage of average variable cost to average total cost. D) a given percentage of average total cost to average total cost.
At the point at which P=MC, suppose that a perfectly competitive firm's MC = $100, its AVC = $80 and its AC = $110. This firm should
A) shut down immediately. B) continue operating in the short run. C) try to take advantage of economies of scale. D) try to increase its advertising and promotion.
A black market is
a. a market that operates outside the legal system, either by selling illegal goods or by selling goods at illegal prices. b. a market where goods and services can be obtained at lower prices. c. a government-mandated market where controls are placed on prices. d. a market where exchanges are made using bartering.
Which of the following is true?
A. Keynesians advocate decreasing the money supply during economic recessions but increasing the money supply during economic expansions. B. Monetarists advocate increasing the money supply by a constant rate year after year. C. Keynesians argue that the crowding-out effect is rather large. D. Monetarists argue that the crowding-out effect is rather insignificant.