Economists assume that the typical person who starts her own business does so with the intention of
a. donating the profits from her business to charity.
b. capturing the highest number of sales in her industry.
c. maximizing profits.
d. minimizing costs.
Ans: c. maximizing profits.
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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
Suppose that the equilibrium price of pickles falls while the equilibrium quantity rises. The most likely explanation for these changes is:
A. a decrease in the supply of pickles. B. a decrease in demand for pickles. C. an increase in demand for pickles. D. an increase in the supply of pickles.
Which of the following will cause an increase in the rental cost/user cost of capital?
A) The rate of depreciation increases. B) The real interest rate decreases. C) The expected profit from the machine decreases. D) all of the above E) none of the above
Refer to the above table. At a wage rate of $23 per worker, the firm will choose to employ:
A. 2 workers
B. 3 workers
C. 4 workers
D. 5 workers