The aging of the U.S. population has tended to ________ spending on health care, and the development of new drugs and medical equipment has tended to ________ spending on health care
A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease
Answer: A
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If the price of pork rinds falls, the substitution effect due to the price change will cause
A) an increase in the quantity of pork rinds demanded. B) a decrease in the quantity of pork rinds demanded. C) an increase in the demand for pork rinds. D) an increase in the demand for corn chips, a substitute for pork rinds.
In 2008, when the net worth of Trust Bank became negative, depositors made a beeline to withdraw their deposits. They feared they might lose all of their deposits if they did not withdraw them. Such a situation is known as: a. a liquidity trap. b. a bank run
c. hyperinflation. d. disinflation.
While net domestic product (NDP) is theoretically a better measure of economic activity than gross domestic product (GDP), GDP is used more frequently because:
A. net exports, which are included in NDP but not GDP, are difficult to measure. B. consumption, which is included in NDP but not GDP, is difficult to measure. C. investment, which is included in NDP but not GDP, is difficult to measure. D. depreciation, which is included in NDP but not GDP, is difficult to measure.
Suppose a perfectly competitive firm faces the following short-run cost and revenue conditions: ATC = $700; AVC = $500; MC = $600; MR = $600. The firm should
A) increase output. B) decrease output. C) continue to produce its current output. D) shut down.