The term equilibrium refers to the point where:
A. buyers and sellers "agree" on the quantity of a good they are willing to exchange at all prices.
B. quantity supplied equals quantity demanded.
C. every buyer and seller achieves their best possible outcome.
D. the supply curve and demand curve do not intersect.
Answer: B
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The income effect
A. moves in the opposite direction from the substitution effect for an inferior good. B. is always greater than the substitution effect. C. moves in the same direction as the substitution effect for an inferior good. D. relates to increases in nominal rather than real income.
Significant barriers to entry exist in a monopolistically competitive industry.
Answer the following statement true (T) or false (F)
The replacement ratio is defined as
a) The cost of replacing a worker b) The cost of employing a new worker relative to the value of output they could produce c) The cost of replacing capital relative to the book value of existing capital d) Unemployment benefit as a share of previous earnings e) None of the above
Which of the following is most likely to be an example of economies of scale?
A. The per-unit costs on Excel Publishing Company's manuals fall because it adopted a new technology after receiving a large order from the government. B. Widget Manufacturing doubled its production by opening a new plant that was identical to its old plant. C. The XYZ Co. increased production 25 percent after a 30 percent increase in all inputs. D. Alpha-Beta Inc. raised its price by 10 percent after a 5 percent increase in production costs.