Refer to the information provided in Figure 30.1 below to answer the question(s) that follow.
Figure 30.1Refer to Figure 30.1. Suppose the economy is currently at Point B. If investors are ________ in aggregate output, investment moves the economy to I2.
A. pessimistic about future growth
B. optimistic about future growth
C. pessimistic about past growth
D. optimistic about past growth
Answer: B
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_____ forces firms in a perfectly competitive market to sell their products at the prevailing market price
a. Pronounced barriers to entry b. The ability to raise prices to levels higher than the marginal cost of production c. A high degree of similarity with competitors' products d. Supernormal profits in the long run
Which of the following is NOT a potential problem due to federal depository insurance?
A. Depositors demand greater interest rates on their deposits to compensate them for the riskier behavior of the managers of the depository institutions. B. Depositors have little incentive to monitor the behavior of the managers of the depository institutions. C. Banks have an incentive to make riskier loans than they would otherwise. D. Lenders have less incentive to investigate the credit-worthiness of borrowers.
When the Gizmo Company could sell a gizmo for $10, it produced 2,500 per month. More recently, the price of a gizmo has fallen to $9 and so Gizmo is only producing 2,000 units per month. What is the price elasticity of supply for gizmos?
A) 0.47 B) -0.47 C) -2.11 D) 2.11
Any rule that is used to make a choice is a
A. positive-sum game. B. zero-sum game. C. strategy. D. rational decision.