How do you know that firms benefit society?
A. Entrepreneurs start businesses.
B. Customers voluntarily pay for their products.
C. Firms pay taxes and employ people.
D. Firms earn profits and produce goods.
Answer: B
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How is the value added for each firm calculated?
a. by multiplying the product value for the previous firm with the product value for the
current firm
b. by dividing the product value for the current firm by the product value for the next firm
c. by subtracting the product value for the previous firm from the product value for the
current firm
d. by adding the product value for the current firm to the product value for the next firm
Which of the following would cause a movement along the investment function?
A. optimistic expectations about business conditions B. technological progress C. an increase in the rate of interest D. a decrease in business taxes
If the MPS in an economy is .1, government could shift the aggregate demand curve rightward by $40 billion by:
A. increasing government spending by $4 billion. B. increasing government spending by $40 billion. C. decreasing taxes by $4 billion. D. increasing taxes by $4 billion.
One million automobiles have a defect that could cause the car to explode; however, only one of those cars will actually explode. Nobody knows which one car it is. When the car does explode, the victim's family will sue the automaker for $1 million and win. The defect costs $2 per car to repair. What does economics predict about the automaker's decision to repair the defect?
What will be an ideal response?