The return that the entrepreneur can obtain in the best alternative business is called the
A) normal profit.
B) economic profit.
C) marginal profit.
D) marginal revenue.
A
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Assume you have been hired to advise two different firms, A and B, regarding the price each firm should charge for its product, focusing on the amount each firm should mark up price over marginal cost
While both firms are price setters, the product produced by firm A is extremely unique and enjoys widespread appeal. In contrast, firm B sells a fairly standard product for which there are are several good, but not perfect, substitutes. How would your advice to each firm differ? How does the price elasticity of demand influence your recommendations?
In the LM curve, the __________ the interest-sensitivity of liquidity preference, the __________ the necessary increase in the rate of interest to restore equilibrium
A) greater; smaller B) greater; greater C) smaller; smaller D) None of the above.
One reason that people hold money is to pay for unexpected car repairs and other unpredictable expenses. This motive for holding money is called:
A. transactions demand. B. precautionary demand. C. speculative demand. D. noncyclical demand.
Commercial society provides incentives to specialize by
A) following one's comparative disadvantage. B) pursuing one's comparative advantage. C) producing somewhere outside the production possibilities frontier. D) producing a narrowly defined good without an interest in the wealth it generates to the producer.