Business inventories increase when firms produce ________.
A. less than they sell, and the inventory increase is subtracted from GDP
B. more than they sell, and the inventory increase is subtracted from GDP
C. more than they sell, and the inventory increase is added to GDP
D. less than they sell, and the inventory increase is added to GDP
Answer: C
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If a firm buys some labor in a competitive market and some labor as a monopsonist, the firm is most likely to
A) pay the same wage to both types of labor. B) pay a lower wage to the labor purchased in the competitive market. C) pay a higher wage to the labor purchased in the competitive market. D) not exercise any of its monopsony power.
An example of a payoff in a game would be:
A. a salary. B. winning an election. C. having clean drinking water. D. All of these are examples of payoffs.
A requirement that the budget be balanced in each calendar year is a misguided overreaction to the fear that in some cases
a. budget surpluses can become too large. b. budget deficits can become too large. c. interest rates would rise. d. interest rates would fall.
If the price of butter increases 5 percent and the amount of margarine purchased increases 25 percent, then the cross-price elasticity of these goods is:
A. 0.2. B. 5. C. -0.2. D. -5.