In a market system, resources will move away from an industry when:
A. Profits of firms in the industry are rising
B. Demand for the industry's product is decreasing
C. The production of output in the industry is rising
D. Profits of firms in other industries are falling
Answer: B
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Expected value represents
A) the actual payment one expects to receive. B) the average of all payments one would receive if one undertook the risky event many times. C) the payment one receives if he or she makes the correct decision. D) the payment that is most likely to occur.
Disadvantages of experiments include the fact that:
A. decisions made in the laboratory replicate those made in the real world. B. laboratory experiments introduce influences on decision making that are difficult to measure or control. C. the number of subjects is typically so large, that it is difficult to apply the results to economic behavior in the population. D. decisions made in the laboratory replicate those made in the real world and the number of subjects is typically so large, that it is difficult to apply the results to economic behavior in the population.
A demand curve is said to be inelastic if:
a. ED = 1 b. ED = 0 c. ED > 1 d. ED < 1
If purchasing-power parity holds, a dollar will buy
a. one unit of each foreign currency. b. foreign currency equal to the U.S. price level divided by the foreign country's price level. c. enough foreign currency to buy as many goods as it does in the United States. d. None of the above is implied by purchasing-power parity.