Which question is an example of a microeconomic question?
A. What factors are contributing to the rise of unemployment in the economy?
B. Will the inflation rate remain relatively stable this year?
C. What should the federal government do to reduce the trade deficit with Japan?
D. Will the merger of two airlines likely result in higher airline ticket prices?
Answer: D
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An industry in which the firm's cost structures do not vary with changes in production will have a long-run supply curve that
A. is perfectly elastic. B. slopes downward. C. is perfectly inelastic. D. slopes upward.
The higher the real interest rate, the ________ investment projects firms can profitably undertake, and the ________ the quantity of loanable funds they will demand
A) more; smaller B) more; greater C) fewer; greater D) fewer; smaller
Among the disadvantages of financing through stock is that
a. the issuance of bonds or commercial paper provides a predictable fixed cost for repayment in contrast to stocks, which represent a stake in the company's future profits b. the costs associated with issuing stocks and all ancillary activities can make issuing common stock more inexpensive than issuing preferred stocks or debt instruments c. all investors see issuing new stock as a negative sign that the company has to sell more of itself in order to survive d. all of these e. none of these
Suppose a profit-maximizing firm in a perfectly competitive market is collecting $1,999 in total revenues. If the total cost of its fixed factors of production falls from $500 to $400, the firm will:
A. earn greater profits or smaller losses. B. expand its output. C. earn smaller profits or larger losses. D. lower its price.