If a business firm continues to sustain losses, what usually happens in a market economy?
What will be an ideal response?
it goes out of business and the resources it was using become available for use in other areas.
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Which of the following statements would make a reasonable hypothesis to test?
A) Deflation is worse than inflation in any economy. B) An unemployment rate below 4% is bad for the economy. C) As tax rates increase, eventually tax revenues will decline. D) Higher real GDP per capita figures lead to happier citizens.
The Cold War has been over since 1991, and foreign aid:
A. has tapered off and is largely nonexistent now. B. is still used as an effective political strategy to prevent communism. C. continues and is still largely dedicated toward building public goods. D. proved to be an ineffective tool in preventing the spread of communism.
Use the following graphs for a perfectly competitive market in the short run to answer the next question.
The graphs suggest that in the long run, as automatic market adjustments occur, the demand faced by the perfectly competitive firm will
A. shift up. B. not shift. C. slope downward. D. shift down.
Figure 7.2
Refer to Figure 7.2. Assume that Ashley faces budget line AB with her $60 income. Then the opportunity cost to her of a book is:
A. one hamburger. B. two hamburgers. C. three hamburgers. D. four hamburgers.