Which of the following is NOT an assumption of the classical model?
A. Households want to maximize economic well being.
B. Wages and prices will move freely in the upward direction but not the downward direction.
C. Buyers and sellers react to changes in relative prices.
D. No single buyer or seller of a commodity can affect its price.
Answer: B
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Farmers selling some of their soybeans in storage because they anticipate a lower price of soybeans in the near future would cause a
A. movement up along the current supply curve of soybeans. B. rightward shift in the current supply of soybeans. C. movement down along the current supply curve of soybeans. D. leftward shift in the current supply of soybeans.
When a monopolist is able to price-discriminate: a. its profits tend to increase and its output tends to fall. b. both its profits and output tend to increase
c. both its profits and output tend to decrease. d. its profits tend to fall and its output tends to increase.
Li works for a wage of $9 per hour. He has 50 hours to devote to work or leisure. If his wage rises to $11 per hour, _____
a. he will spend more time working because his opportunity cost of leisure will rise b. he will spend less time working because his opportunity cost of leisure will rise c. he will spend less time working because his opportunity cost of leisure will fall d. he will spend more time working because his opportunity cost of labor will rise
The economic way of thinking is
a. a set of historical generalizations that indicates what goods should be produced. b. a body of statistical data that indicates how an economy should be organized. c. a set of basic concepts that helps one understand human choices. d. a set of complex, highly abstract theories that provides persons skilled in statistics with the information necessary to tell others what choices they should make.