Refer to the above figure. The figure represents the market demand and supply curves for widgets in a perfectly competitive market. What statement can be made about the demand curve for an individual firm in this market?
A. An individual firm's demand curve will be a smaller version of the market demand curve.
B. An individual firm's demand curve will be horizontal at $5.
C. An individual firm's demand curve will be horizontal at a price below $5.
D. An individual firm's demand curve cannot be determined from the graph above.
Answer: B
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When economists say scarcity, they mean:
A. there are only a limited number of consumers who would be interested in purchasing goods. B. human wants exceed the available supply of time, goods and resources. C. most people in poorer countries do not have enough goods. D. goods are so expensive that only the rich can afford it.
The use of seat belts and other automobile safety features making bicycling more hazardous can be explained by the economic concept known as:
A. the real-nominal principle. B. the marginal principle. C. the principle of voluntary exchange. D. the principle of diminishing returns.
We will generally observe that the more open an economy
A) the larger the effect of fiscal policy on output and the larger the effect of fiscal policy on the trade position. B) the larger the effect of fiscal policy on output and the smaller the effect of fiscal policy on the trade position. C) the smaller the effect of fiscal policy on output and the larger the effect of fiscal policy on the trade position. D) the smaller the effect of fiscal policy on output and the smaller the effect of fiscal policy on the trade position.
U.S. government regulation of social and economic activity
A) only began after World War II. B) costs less now than it did in the 1980s. C) has increased steadily since 1970. D) is confined to antitrust law.