Investment decisions are made on the basis of the relationship of price to
A. Long-run fixed cost.
B. Short-run marginal cost.
C. Short-run average total cost.
D. Long-run average total cost.
Answer: D
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If the wage rate rises, then in the long run, the firm will replace some of its labor with other factors such as capital, even if it keeps its output level constant. This phenomenon is known as
a. the substitution effect. b. the scale effect. c. the regressive-factor effect. d. the factor-price effect.
Non-credible threats that are made in a Nash equilibrium (that is not subgame perfect) of a sequential game cannot be made in the first stage by the player who begins the game.
Answer the following statement true (T) or false (F)
National income is defined as gross national product minus
a. depreciation and net taxes. b. national income. c. depreciation. d. personal disposable income.
If the financial innovations such as ATM machines make money demand less elastic than it was before, then
a. the LM curve will become steeper. b. the LM curve will become flatter. c. both the IS and LM curves will become flatter. d. the LM curve will shift to the left.