The rule of rational choice:
a. requires the availability of complete information before decisions can be made.
b. can only be applied in business decisions
c. involves "marginal thinking."
d. is the basis on which only greedy people make decisions.
c
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The money demand curve will shift to the left if:
A. the price level decreases. B. the nominal interest rate decreases. C. the nominal interest rate increases. D. the price level increases.
Suppose a monopolist has zero marginal cost. If he faces a market demand curve with constant price elasticity of -2, the profit maximizing output level approaches infinity.
Answer the following statement true (T) or false (F)
A tax on polluting firms
A. would shift the LRAC curve upward. B. would shift the LRAC curve downward. C. would have the same impact on the firm as a subsidy. D. tends to have the perverse effect of increasing pollution.
From the standpoint of ________, specialization in lending is surprising but makes perfect sense when one considers the ________ problem
A) moral hazard; diversification B) diversification; moral hazard C) adverse selection; diversification D) diversification; adverse selection