Refer to the scenario above. Which of the following is true, if the individual is optimizing in levels?
A) An optimizer will rent the hotel room for three days, if the net benefit of staying for the third day is negative.
B) An optimizer will rent the hotel room for three days, if the cost of staying for two days exceeds the cost of staying for three days.
C) An optimizer will rent the hotel room for three days, if the net benefit of staying for three days exceeds the net benefit of staying for two days.
D) An optimizer will rent the hotel for three days, if the total benefit of staying for three days exceeds the total benefits of staying for two days.
C
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At any point on the LM curve
a. there is labor market equilibrium. b. money supply equals money demand. c. equilibrium output equals potential output. d. both commodity and money market are necessary for equilibrium. e. both b and c.
The theory of countervailing power asserts that
a. government must counter the power of big business b. the government must nationalize all important industries c. market power in one sector will be held in check by market power in another sector d. big firms will all join together to raise prices and profits e. small firms are a sufficient countervailing force to neutralize the harmful effects of big business
When a firm experiences increasing marginal returns, the marginal cost of output also increases. Similarly, when the firm experiences decreasing marginal returns, the marginal cost of output also decreases
Indicate whether the statement is true or false
As it relates to economic growth, the term long-run trend refers to:
A. the long-run increase in the relative importance of durable goods in the U.S. economy. B. the long-term expansion or contraction of business activity that occurs over 50 or 100 years. C. fluctuations in business activity that average 40 months in duration. D. fluctuations in business activity that occur around Christmas, Easter, and other major holidays.