Answer the following statement(s) true (T) or false (F)
1. Firms are so diverse in size and organization that it is not possible to make any general statements about their behavior.
2. Economists attempt to understand firm behavior by making the generalization that firms act to maximize growth.
3. In order to maximize profits, firms should produce to the point where marginal revenue is equal to marginal cost.
4. If the total benefits received from drug enforcement exceed its total costs, then the government should expand its drug enforcement activity.
5. Total cost and marginal cost can both be plotted on the same graph since both include a measure of quantity.
1. False
2. False
3. True
4. False
5. False
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If the demand curve is a downward sloping straight line, the price elasticity of demand always
A) increases as the demand curve shifts rightward. B) increases as the demand curve shifts leftward. C) increases with movements upward along the demand curve. D) decreases with movements upward along the demand curve.
Economies of scale are also known as
a. Increasing returns to scale b. Decreasing returns to scale c. Constant returns to scale d. None of the above
The unemployment rate is defined as
A. the percentage of the population that is unemployed. B. the percentage of the labor force that is unemployed. C. all unemployed workers, including discouraged workers, divided by the total labor force. D. all unemployed workers, including discouraged workers, divided by the total population.
Currency traders expect the value of the dollar to fall. What effect will this have on the demand for dollars and the supply of dollars in the foreign exchange market?
A) Demand for dollars will increase, and supply of dollars will decrease. B) Demand for dollars will increase, and supply of dollars will increase. C) Demand for dollars will decrease, and supply of dollars will increase. D) Demand for dollars will decrease, and supply of dollars will decrease.