If government finances fiscal policy through additional borrowing, it could affect the loanable funds market by causing
A. an increase in the quantity demanded and an increase in supply for loanable funds.
B. an increase in the demand and an increase in the quantity supplied for loanable funds.
C. an increase in the quantity demanded and an increase in the quantity supplied for loanable funds.
D. an increase in the demand and an increase in supply for loanable funds.
Answer: B
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The above figure shows a perfectly competitive firm. If the market price is more than $20 per unit, the firm
A) will definitely shut down to minimize its losses. B) will stay open to produce and will make zero economic profit. C) will stay open to produce and will incur an economic loss. D) will stay open to produce and will make an economic profit. E) might shut down but more information is needed about the fixed cost.
Perfectly competitive firms must make all of the following decisions except
A. what price to charge for their output. B. how much of each input to demand. C. how much output to supply. D. which production technology to use.
When a market is not in equilibrium:
A. a change in either supply or demand is required to reestablish equilibrium. B. there is neither excess supply nor excess demand. C. the economic motives of sellers and buyers will move the market to its equilibrium. D. government intervention is required to achieve equilibrium.
Diminishing marginal utility means that as you consume more of a good, other things constant, the:
a. total satisfaction you obtain from consuming this good falls. b. total amount produced falls. c. marginal product falls. d. additional satisfaction you obtain from each additional unit of the good falls. e. total satisfaction you obtain from each extra good becomes constant.