A college student is thinking about running an ice-cream truck over the summer. What would economists say is the student's main objective?
A. To spend as little on inputs as possible
B. To maximize hourly earnings
C. To sell as many ice cream cones as possible
D. To maximize his profit
D. To maximize his profit
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In a perfectly competitive market, situations of surplus or shortage of a good:
A) exist till the government or any ruling authority intervenes. B) are permanent phenomena. C) can exist simultaneously. D) are self-corrected due to the competitive nature of the market.
A stock mutual fund's primary advantage is to allow
A) investors to diversify away systematic risk. B) investors to diversify away all risk. C) investors to diversify away idiosyncratic risk. D) the rich to avoid taxes.
In the intermediate range of the aggregate supply curve, higher aggregate demand will increase:
a. both the price level and real GDP. b. real GDP without raising the price level. c. the price level without affecting real GDP. d. the price level but reduce real GDP.
Vertical foreclosure is an example of a firm:
A. engaging in penetration pricing. B. that merges with a rival firm with the intention of eliminating the rival firm's product from the market. C. that controls an essential upstream input and raises rivals' costs by refusing to sell to other downstream firms that need the input. D. engaging in a price-cost squeeze.