The economic way of thinking includes:
A) attention paid to the opportunity costs involved in any choice.
B) the assumption that individuals choose to average out some objective.
C) concern with the biological make up of decision makers.
D) emphasis on how choices affect total values rather than marginal values.
Ans: A) attention paid to the opportunity costs involved in any choice.
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Today, firms in a perfectly competitive market are making an economic profit. In the long run, firms will ________ the market until all firms in the market are ________
A) exit; covering only their total fixed costs B) enter; making zero economic profit C) exit; producing at the minimum point on their long-run average cost curve D) enter; making zero normal profit
A functional relationship exists between two variables if the value of one variable depends on the value of the other variable
a. True b. False
Economic growth is represented by an inward shift of the production possibility curve
a. True b. False Indicate whether the statement is true or false
To eliminate an AD shortfall of $120 billion when the economy has an MPC of 0.75, the government should decrease taxes by
A. $400 billion. B. $40 billion. C. $120 billion. D. $30 billion.