When asked to reveal their true preferences people
A. always tell the truth.
B. never tell the truth.
C. sometimes tell the truth.
D. generally don't know what preferences are.
C. sometimes tell the truth.
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Starting from long-run equilibrium, a war that raises government purchases results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; potential C. higher; higher D. lower; higher
The demand and supply schedules for pizza are in the table above. If the government sets a maximum legal price of $2 per slice of pizza, then
A) there is a shortage of 20 slices of pizza. B) this maximum price is an example of a price floor. C) this maximum price is an example of a price ceiling. D) Both answers A and C are correct. E) Both answers B and C are correct.
During the recession phase of the business cycle, households become pessimistic about their future earning capacity as do banks. Nominal interest rates fall during recessions. Mortgage lending could be expected to
A) rise if the change in future earnings is thought to be greater than the change in interest payments. B) stay the same. C) fall. D) fall if the change in future earnings is thought to be greater than the change in interest payments.
Answer the following statements true (T) or false (F)
1) Managers can reduce production or delivery costs by keeping an inventory of the goods they produce or sell. 2) Managers incur opportunity costs from holding goods in inventory. 3) The cost minimizing inventory sets the marginal benefit of increasing the order size equal to its marginal cost. 4) In most cases, the cost-minimizing order quantity depends on the variable cost per unit of ordering. 5) The optimal order quantity and the optimal inventory level increase as the cost of carrying a unit in inventory increases.