Economics promotes which of the following as the way to make the best decision?
A) Continue an enjoyable activity up to the point where its marginal benefit equals its marginal cost.
B) Continue an enjoyable activity until it is no longer enjoyable.
C) Continue an enjoyable activity until you cannot afford to pursue it.
D) Continue an enjoyable activity as long as you do not have to pay for it.
A
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Suppose the government deficit increases, but the interest rate remains the same. Which of the following things might have happened simultaneously to keep interest rates the same?
a. The government reduces the amount that people may put into savings accounts on which the interest is tax exempt. b. Because they are optimistic about the future of the economy, firms desire to borrow more to purchase physical capital. c. Consumers decide to decrease consumption and work more. d. All of the above could explain why the interest rate would be unchanged.
In a free market economy, current consumption, saving and investment decisions
a. are controlled largely by the government. b. shape the future course of the national economy. c. are necessarily controlled by big businesses. d. require protection from foreign forces if individuals desire wealth accumulation.
All else equal, U.S. imports from Germany create a:
A. demand for European euros. B. supply of European euros. C. demand for American dollars. D. surplus of European euros.
Which of the following is most vital if the firms in an industry are going to earn economic profit in the long run?
a. an inelastic demand for the product produced by the firms b. an elastic demand for the product produced by the firms c. managerial efficiency d. high barriers to entry into the industry