Why is the demand curve horizontal for a perfectly competitive firm?
What will be an ideal response?
The demand curve for a perfectly competitive firm is horizontal to reflect the fact that if it raises its price, its sales will drop to zero. The firm has no control over the market price.
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The multiplier measures the:
A. effect of government spending or tax cuts on national income. B. number of times each dollar is spent in the economy. C. supply of money in the economy. D. effect of household spending on national income.
A rational citizen may decide not to vote __________.
a. but is then behaving in an irrational manner even if they are utility maximizing b. if the issues are not interesting to them even though the cost of obtaining information and voting are low c. if the cost of obtaining information about the issues and voting are greater than the chance their one vote will influence the election d. if the benefits of voting are low or non-existent even when the costs of voting are low
If the economy of Gwondanaland is growing more rapidly than the economy of Japan, most likely
a. Japan has more current investment than Gwondanaland. b. Japan has more government spending than Gwondanaland. c. Japan spends more on capital goods than Gwondanaland. d. Gwondanaland has lower current consumption than Japan. e. Gwondanaland has lower current investment than Japan.
If two choices are the same but one is presented in a positive manner and one in a negative context, people:
A. respond differently because of the framing effect. B. are rational and respond the same. C. respond differently because of the endowment effect. D. respond the same because of the endowment effect