By definition, a firm is
A) a business organization that makes profits.
B) a business organization that utilizes resources to produce goods or services with the goal of making a profit.
C) a business organization that consists of more than one person.
D) an organization, whether private or public, that may or may not make a profit.
Answer: B
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Federal spending and taxation both affect and are influenced by the overall level of economic activity
Indicate whether the statement is true or false
The Laffer curve is representative of which of the following schools?
a. Supply-side school. b. Rational expectations school. c. Keynesians. d. Neo-Keynesians. e. Classical school.
The metaphor used to describe the working of the price system to achieve efficiency in a free market is
a. Occam's razor. b. the prisoner's dilemma. c. the invisible hand. d. the benefit principle.
Which idea is inconsistent with perfect competition?
A. price-taking behavior B. a large number of buyers and sellers C. product differentiation D. freedom of entry or exit for firms