Which of the following most likely describes economics?
a. Economics is not a form of moral instruction.
b. Economics is a form of moral instruction.
c. Economics seeks to describe economic behavior as it should exist.
d. Economics does not seek to describe behavior.
a. Economics is not a form of moral instruction.
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Why do people often tend to take risks if they are insured?
What will be an ideal response?
Given the reserve-holding ratio e and the fraction of deposits held as cash c, the deposit multiplier becomes
A) e - c. B) 1/(e - c). C) e/c. D) ec. E) 1/(e + c).
The "composite good" refers to
A. income not spent on good X in a two-dimensional graphical presentation. B. large purchases that cannot be incrementally divided. C. an abstraction requiring more than a three dimensional graph. D. the notion that consumer pleasure cannot be modeled graphically.
Answer the following questions true (T) or false (F)
1. If a monopolist's price is $50 and average total cost is $43, then the average profit is $7. 2. If a monopolist's marginal revenue is $15 per unit and its marginal cost is $25, then to maximize profit the firm should decrease output. 3. In the short run, even if a monopoly's total revenue does not cover its variable costs, it should continue to produce because ultimately in the long run, the monopoly will start earning profits.