A policymaker in favor of stabilizing the economy would be likely to believe
a. recessions are a waste of resources.
b. economies must suffer through the booms and busts of the business cycle.
c. the long policy lags make implementing policy changes in response to recession too risky.
d. policy increases the magnitude of economic fluctuations.
Ans: a. recessions are a waste of resources.
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Refer to Figure 7.1. In this case, the property rights belong to
A) Angus. B) Dudley. C) no one. D) both Angus and Dudley.
In the short run, the profit maximizing (or minimizing) quantity of output for any firm to produce exists at that output level at which marginal revenue equals marginal cost
a. True b. False Indicate whether the statement is true or false
A constant-cost, perfectly competitive market is in long-run equilibrium. At present, there are 1,000 firms each producing 400 units of output. The price of the good is $60. Now suppose there is a sudden increase in demand for the industry's product
which causes the price of the good to rise to $64. In the new long-run equilibrium, how will the average total cost of producing the good compare to what it was before the price of the good rose? A) The average total cost will be higher than it was before the price increase since the increase in demand will drive up input prices. B) The average total cost will be lower than it was before the price increase because of economies of scale. C) The average total cost will be higher than it was before the price increase because of diseconomies of scale arising from the increased demand. D) The average total cost will be the lower than it was before the price increase as output increases.
What is one of the biggest differences between a sole proprietorship and a corporation?
A) Sole proprietorships offer stock. B) Corporation shareholders elect the managers of the firm. C) Sole proprietorships have limited liability. D) Corporations are the only profitable firms.