If an individual has a 0.3 probability of receiving $10 and a 0.7 probability of receiving $20, the expected income is
A) $20.
B) $7.
C) $14.
D) $17.
D
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A Keynesian econometric model is likely to emphasize that monetary policy affects economic activity through changes in
A) the money supply. B) reserve requirements. C) interest rates. D) currency holding by the public.
Whether the firm produces or shuts down in the short run, fixed cost is equal to
a. average variable cost b. total cost c. sunk cost d. price e. marginal cost
Suppose that a normal rate of return in the economy is 10% and the rate of return being earned by firms in a competitive industry equals exactly 10%. Which of the following is a correct prediction based on this information?
A. Firms already in the industry will want to expand to try to increase their rate of return. B. Firms in the industry will not undertake any investment projects other than to replace depreciating capital stock. C. The industry size will contract. D. New firms will want to enter this industry, as the existing firms are earning an economic profit.
During a recession when people's incomes drop, grocery chains experience much smaller declines in sales than do upscale department stores. Explain this phenomenon using the concept of elasticity
What will be an ideal response?