Ron decides which stocks to purchase by throwing darts at the stock pages of The Wall Street Journal. Ron probably believes that
a. stock prices follow a random walk.
b. the stock market is informationally efficient.
c. it is better to own stock in 20 companies than it is to own stock in 2 companies.
d. All of the above are correct.
d
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The two sectors of the economy in the simple circular flow model are
A) the employed and the unemployed. B) households and businesses. C) foreign markets and domestic markets. D) the private sector and the public sector.
(Appendix) In the production function Q = 10L1/2K1/2 calculate the marginal product equations of both inputs.
What will be an ideal response?
Samurai Sam's, a producer of frozen sushi, is a monopolistically competitive firm. The firm is currently selling frozen California rolls at a $4 price. Samurai Sam's marginal cost is $1.75 and its marginal revenue is $1.50. The firm should ________ to maximize profits in the short run.
A. continue to produce the same output level B. decrease output to where price just equals marginal cost C. increase output to where price just equals marginal cost D. Indeterminate from the given information.
An above full-employment equilibrium is
A) a theoretical possibility but cannot happen in reality. B) the equilibrium in which the economy is in most of the time. C) when real GDP exceeds potential GDP. D) the period of time when prices are falling.