The subject of economics is primarily the study of:
A. the government decision-making process.
B. how to operate a business successfully.
C. decision-making because of the problem of scarcity.
D. how to make money in the stock market.
Answer: C
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Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies. 
A. D; C B. B; C C. B; A D. D; B
What are transactions costs? Why do transactions costs create difficulties in finding a private solution to the problem of pollution?
What will be an ideal response?
A two-tier gold market like the one created during the Bretton Woods System refers to
A) a private tier for private gold traders where the price would not be allowed to fluctuate, and an official tier for central banks where the official gold price would be allowed to fluctuate. B) a private tier for private gold traders where the price would not be allowed to fluctuate, and an official tier for central banks where the official gold price would rise on a yearly basis by pre-determined increments. C) a private tier for private gold traders where the price would be allowed to fluctuate, and an official tier for central banks where the official gold price would be set at $35 an ounce. D) a private tier for private gold traders where the price would be set at $35 an ounce, and an official tier for central banks where the official gold price would be allowed to fluctuate. E) a private tier for private gold traders where the price of gold would rise on a yearly basis by pre-determined increments, and an official tier for central banks where the official gold price would be set at $35 an ounce.
Under monopolistic competition:
A. firms can sell all the output they wish without affecting the price. B. a single seller serves the market. C. firms face a downward-sloping demand curve. D. firms have no monopoly power.