The silly clothes worn by a circus clown are an example of
a. market inefficiency
b. capital goods
c. labor, if it is used by labor exclusively
d. human capital
e. entrepreneurship, if the clown becomes more creative wearing the clothes
B
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Which of the following is NOT held as an asset by banks?
A) securities B) loans C) reserves D) currency in the banks' vaults E) checkable deposits
A structured and simplified version of reality that can be used to explain real-world behavior is called
A) an economic model. B) a rationality assumption. C) a postulate. D) a normative alternate reality.
Figure 8.4 depicts demand and costs for a monopolistically competitive firm. If the firm's demand curve shifts to the left as more firms enter the market:
A. the firm's average cost will be lower at the new profit-maximizing output level. B. the firm's marginal cost will be higher at the new profit-maximizing output level. C. the firm's marginal revenue will remain the same at the new profit-maximizing output level. D. the firm's marginal cost will remain the same at the new profit-maximizing output level.
Refer to the diagram, in which Q f is the full-employment output. The shift of the aggregate demand curve from AD 1 to AD 2 is consistent with:
A. an expansionary fiscal policy.
B. a major recession.
C. a contractionary fiscal policy.
D. severe demand-pull inflation.