When jobs are easy to find, wage increases are frequently given, and businesses are doing well, the economy is most likely in a(n):
A. surplus.
B. recession.
C. depression.
D. expansion.
Answer: D
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Two perfectly competitive firms, Firm A and Firm B, both face random demand and have the same expected marginal revenue, as illustrated in the figure below. For which firm would a forecast of demand be more valuable?
A) Firm A
B) Firm B
C) The value for each firm is the same because the high demand, low demand, and expected marginal revenue are the same.
D) A forecast is more valuable for Firm A if the demand will be high and more valuable for Firm B if the demand will be low.
In a market where businesses are earning high profits, new entrants will cause the supply curve to shift to the _________ and thus cause the market price to _________.
A. right; rise B. left; rise C. left; fall D. right; fall
The total utility of consuming 6 units of a good is 255. The marginal utility of the 6th unit is 45 and the marginal utility of the 5th unit is 65. The total utility of consuming 5 units of the good is
A. 150. B. 210. C. 195. D. 300.
The change in consumption brought about by a change in purchasing power of savings that results from a change in the price level is the
A. real wealth effect. B. interest rate effect. C. consumption effect. D. money supply effect.