The figure below depicts the short-run market equilibrium in a perfectly competitive market and the cost curves for a representative firm in that market. Assume that all firms in this market have identical cost curves.
A starting assumption about this industry was that all of the firms in the market had identical cost curves. This assumption is:
A. unrealistic because firms closely guard the details of their production processes.
B. realistic because firms rarely seek out cost-saving innovations.
C. unrealistic because each firm is unique.
D. realistic because any cost-saving innovation adopted by one firm will be quickly adopted by others.
Answer: D
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Investment is a(n) ____ and capital is a ____ variable.
A. physical; financial B. stock; flow C. asset; liability D. flow; stock
The figure above shows a local lawn cutting service's demand for labor curve when the price of cutting an acre of lawn is $50 per acre. If the wage rate rises from $100 per day to $200 per day, the firm's demand for labor curve
A) shifts leftward. B) shifts rightward. C) does not shift at all, but the firm moves upward along the curve. D) None of the above because this change shifts the supply of labor curve.
Which of the following does NOT appear on a prospectus?
A) The price of the securities being issued B) The salaries of the borrowing firm's top executives C) Audited financial statements of the borrower D) An explanation of any unusual rights granted to stockholders
Time-series forecasting models:
a. are useful whenever changes occur rapidly and wildly b. are more effective in making long-run forecasts than short-run forecasts c. are based solely on historical observations of the values of the variable being forecasted d. attempt to explain the underlying causal relationships which produce the observed outcome e. none of the above