The cartel consisting of Firm A and Firm B can become unstable if:
a. the cost of production is identical for the two firms
b. the cost of production of Firm A is lower than that of Firm B.
c. the cost of labor in the industry increases by 12 percent.
d. both firms switch to a better method of production.
b
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When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
Javier has been thinking about purchasing a bond but is afraid that the bond will lose value. He has decided to hold money instead. This is known as the
A) money balance demand for money. B) precautionary demand for money. C) transactions demand for money. D) asset demand for money.
If it is a cultural norm to believe that "a busy person is an important person," then we would expect the labor:
A. demand in that culture to be relatively greater at any wage. B. supply in that culture to be relatively lower at any wage. C. demand in that culture to be relatively lower at any wage. D. supply in that culture to be relatively greater at any wage.
Which of the following will likely occur when price floors in agriculture are implemented?
A. Quantity demanded will exceed quantity supplied. B. Quantity supplied will exceed quantity demanded. C. Farmland will be underutilized. D. Supply will decrease.