If the price of a textbook rises and then students purchase fewer textbooks, an economic model can show a cause-and-effect relationship only if which of the following conditions holds:
A. students' incomes fall.
B. tuition decreases.
C. the number of students increases.
D. everything else is constant.
Answer: D
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In the long run, in a perfectly competitive industry:
A. economic loss tends to persist. B. the number of firms in the industry will increase. C. economic profit tends to persist. D. economic profit and loss are driven to zero by entry and exit.
When a price support is set above the equilibrium price, producers ________ the quantity supplied and consumers ________ the quantity demanded
A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease E) do not change; do not change
Economists define risk as
A) the difference between the interest rate borrowers pay and the interest rate lenders receive. B) the chance that the value of financial assets will change from what you expect. C) the ease with which an asset can be exchanged for other assets or for goods and services. D) the difference between the return on common stock and the return on corporate bonds.
The difference between the gross public debt and the net public debt is
A) the sum of all previously accumulated government budget deficits and surpluses. B) the sum of all previously issued U.S. government securities that have been purchased by foreign residents. C) all private-sector borrowing from private sources. D) all government interagency borrowing.