Microeconomics differs from macroeconomics in that microeconomics focuses on:
A. the performance of the entire economy.
B. government policies designed improve the performance of the national economy.
C. the choices made by individuals and the implications of those choices.
D. issues such as inflation, unemployment and economic growth.
Answer: C
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When a good is nonexcludable, then individuals
A. will purchase the good for more than what it cost to produce the good. B. can obtain the benefits of the good without paying for it. C. have an incentive to become free riders. D. will purchase more than the optimum amount. E. b and c
Identify the correct statement
a. The removal of financial market regulations has lowered the probability of a financial crisis to zero. b. Investment in residential housing in the U.S. was less volatile during the era prior to the removal of Regulation Q. c. Investment in residential housing in the U.S. was more volatile after the removal of Regulation Q. d. The removal of financial market regulations lowered output volatility. e. The removal of financial market regulations increased variability in consumer spending.
People learn to hold a specific quantity of money for the groceries, theater tickets, gasoline, clothes, film, and other items they habitually purchase. This behavior is representative of the:
A. precautionary demand. B. speculative demand. C. transactions demand. D. volatility demand.
A firm is currently producing at the point where MC = MR. The situation for the firm at this point is P = $5, Q = 100, ATC = $6, AVC = $4.50. What do you recommend this firm do?
A. Increase production above the current output rate, because MC = MR at this rate of output. B. Shut down, because ATC > P. C. Shut down, because AVC > P. D. Continue to produce the current output rate, because P > AVC.