Only a firm with ________ will be able to make their output profitably.
A. the highest opportunity cost of production
B. low variable costs
C. a comparative advantage at producing their output
D. an absolute advantage at producing their output
Answer: C
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According to the Law of Supply,
a. price and quantity supplied are positively related, c.p. b. firms produce less output as the price of the product rises, ceteris paribus c. marginal cost rises as the firm contracts production d. there is an inverse relationship between output and price, holding all else constant
Holding other factors constant, if the income tax is replaced with a consumption tax so that saving is not taxed, then the real interest rate will ________ and the equilibrium quantity of saving and investment will ________.
A. increase; increase B. increase; not change C. decrease; increase D. increase; decrease
The demand for loanable funds curve is
A) downward sloping when plotted against the real interest rate. B) vertical at the full employment level of investment. C) constant at the maximum expected profit rate. D) upward sloping when plotted against the real interest rate.
The study of how people make decisions in situations where attaining their goals depends on their interactions with others is called
A) game theory. B) dominant strategy equilibrium. C) the prisoner's dilemma. D) Nash equilibrium.