If the market demand increases for a good sold in a perfectly competitive market, individual firms in the market:
A. will be able to charge a higher price for their product.
B. will need to lower price in order to remain competitive.
C. will not be able to change their price.
D. will begin earning economic losses.
Answer: A
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In the figure above, the Lorenz curve that shows the least inequality, but NOT perfect equality, is
A) curve A. B) curve B. C) curve C. D) curve D.
Economists define the term marginal utility (mu) as:
a) The additional satisfaction gained divided by the additional cost of the last unit. b) Total satisfaction gained when consuming a given number of units. c) The process of comparing marginal units of all goods, which could be purchased. d) The additional satisfaction obtained by consuming one extra unit of a good.
When studying human behavior, economists assume rational self-interest. This means that:
A. People make decisions based on some desired outcome B. People are quite selfish, and are not concerned about others C. People always make the right decisions D. People have all the information they need to make a decision
Ahmed is working and is spending more than he is earning by using his savings to make up the difference. Which of the following statements is TRUE?
A. Ahmed is in equilibrium since he pays all of his bills. B. Ahmed is in disequilibrium. C. By using savings Ahmed has caused the balance of payments to go into a deficit situation. D. By using savings Ahmed is using special drawing rights.