Preferences have just shifted away from beef and into mutton. If you are a sheep rancher, the best profit-maximizing strategy is to
A. shift some of your ranching capacity into cattle raising.
B. shut down.
C. cut prices to increase market share.
D. produce as much as possible to earn profits in the short run.
Answer: D
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If relevant information can be obtained at no cost, people are ________ when they fail to use all available information given that there are usually ________ to making a wrong forecast.
A. not behaving rationally; costs B. behaving rationally; costs C. not behaving rationally; no costs D. behaving rationally; no costs
Refer to Figure 11.2. Suppose that Ca = 40, MPC = 0.8, I = 10. What is the value of consumption in equilibrium?
A) 32 B) 80 C) 240 D) 320
Which of the following is NOT an appropriate role for government to play in the economy?
A. Addressing externalities B. Promoting free speech in marketing C. Redistributing income D. Regulating markets
The following are national income account data for a hypothetical economy in billions of dollars: gross private domestic investment ($320), imports ($35), exports ($22), personal consumption expenditures ($2460), and government purchases ($470). What is GDP in this economy?
A. $3250 billion. B. $3237 billion. C. $3263 billion. D. $3290 billion.