What economists call the law of one price depends on:
A. the inertia effect.
B. people seeking to exploit profit opportunities.
C. government action.
D. random chance.
Answer: B
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In the United States since the 1920s, there has been only one decade that appears to accord fairly well with the RBC theory of business cycles:
A) the 1930s. B) the 1960s. C) the 1970s. D) the 1980s.
In the presence of no externalities,
A) social marginal cost exceeds private marginal cost. B) social marginal cost is less than private marginal cost. C) social marginal cost equals private marginal cost. D) social marginal cost and private marginal cost cannot be compared.
Consumers are generally willing to spend more time researching cars before making a purchase than they do researching paper towels because: a. the cost of gathering information about paper towels is very small
b. the cost of gathering information about cars is less than the cost of gathering information about paper towels. c. the cost of gathering information about cars is less than the cost of gathering information about paper towels. d. the net benefit from gathering additional information about paper towels is likely much greater than the net benefit derived from gathering additional information about cars.
The price reduction effect of the sale of a firm's last ?Q units of output is:
A. the additional revenue from selling ?Q units at price P(Q). B. the reduced revenue from selling (Q - ?Q) units at a lower price of P(Q). C. the additional revenue from selling ?Q units at price P(Q + ?Q). D. the reduced revenue from selling (Q - ?Q) units at a lower price of P(Q - ?Q).