The long-run exit rule is to exit the industry if:
A. P > AVC.
B. P < AVC.
C. P > ATC.
D. P < ATC.
D. P < ATC.
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The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output. B. government policy. C. decreasing inflation only. D. increasing or decreasing inflation.
Whenever the marginal product of a firm's only variable input was positive, but falling: a. its total product is growing at a decreasing rate
b. it will use more of the variable input until its marginal product is negative. c. it would reduce its use of the variable input. d. its total product is beyond its maximum.
As the housing bubble collapsed, as more foreclosures occurred, and the supply of homes for sale:
A. increased, it further decreased home values, which led to more foreclosures. B. decreased, as homeowners refused to sell when they owed more than the market value. C. decreased, as homeowners no longer wanted to sell their homes when prices were low. D. increased, the price of homes fell, and so the demand for homes increased.
Harry's employer offers a "Holiday Account," which means they will take $50 a month out of Harry's paycheck and deposit it into this account throughout the year. In December, they give Harry the money in the account to spend during the holidays. Harry regularly carries about $200 of credit card debt each month. Harry's decision to set aside some of his money in this account is an example of:
A. ignoring the fungibility of money. B. recognizing that money is fungible. C. needing to categorize expenditures to make rational decisions about money. D. being rational.