The existence of scarcity means that
A. the government will step in to eliminate the scarcity.
B. firms working with the government will allocate resources to eliminate the scarcity.
C. there are not enough resources to satisfy unlimited human wants.
D. firms will increase their production to eliminate the scarcity.
Answer: C
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Marginal cost
A. equals both average variable cost and average total cost at their respective minimums. B. is the difference between total cost and total variable cost. C. declines continuously as output increases. D. rises for a time but then begins to decline when diminishing marginal returns set in.
A decrease in the price of pizza will lead to a(n):
A. increase in the demand for pizza. B. increase in the quantity of pizza demanded. C. decrease in the number of consumers. D. decrease in the quantity of pizza demanded.
New classical economists say that an unanticipated decrease in aggregate demand first:
A. decreases the price level and real output, and then decreases long-run aggregate supply. B. decreases long-run aggregate supply, and then decreases the price level and real output. C. reduces short-run aggregate supply, and then reduces long-run aggregate supply. D. decreases the price level and real output, and then increases short-run aggregate supply such that the economy returns to the full-employment level of output.
Orange Computers, Inc., is planning to spend $200,000 on the promotion of its new portable music player next year. The current market interest rate is 5 percent. What is the present value of this promotional budget?
A. $175,146 B. $185,123 C. $190,476 D. $200,000