In order to understand how the price of a good is determined in the free market, one must account for the
A. purchasers exclusively.
B. sellers exclusively.
C. governmental agencies exclusively.
D. purchasers and sellers.
Ans: D. purchasers and sellers.
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A woman who decides to drive to work rather than take the bus
A) is wasting scarce resources. B) is behaving inefficiently. C) thinks driving is more economically efficient for her. D) is probably paying attention to personal comfort and convenience rather than economic efficiency.
With the full implementation of the Single European Act, the EU became a
A) common market. B) free trade area. C) customs union. D) economic union. E) None of the above.
Assume at the firm's profit-maximizing level of output P = AVC. In this case, the firm will be:
A) earning a positive economic profit. B) earning economic profit = 0. C) incurring an economic loss. D) breaking even.
Assume the central bank lowers the discount rate. What is the net effect on the unemployment rate (assume fixed exchange rates)? Answer assuming all the adjustments have worked their way through the macroeconomic system, and it is in equilibrium
a. The unemployment rate rises. b. The unemployment rate falls. c. The unemployment is not affected. d. The change in the unemployment rate depends on the degree of international capital mobility.