Real rates of return are
A. not taxed.
B. not adjusted for inflation.
C. adjusted for inflation.
D. used in individual financing and not corporate financing.
C. adjusted for inflation.
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The level of detail in an economic model
a. is as close as possible to the level of detail in reality b. depends on the purpose of the model c. is as complex as possible d. is the same regardless of the purpose of the model e. is as complex as possible to accomplish its purpose
Holding all other factors constant, which of the following would shift the demand curve for air travel to the left?
(a) An increase in fuel costs. (b) Increased wages for airline staff. (c) Decreased price of ferry tickets. (d) Both (b) and (c).
In the short run, a firm will stay in business as long as:
A. price equals average revenue. B. marginal revenue is greater than or equal to marginal cost. C. price exceeds average variable cost. D. price is less than average variable cost.
Assume a perfectly competitive firm is in long-run equilibrium and there is a decrease in market demand for the firm's output. Which of the following will occur?
A) Existing firms will maintain the original level of output, but they will shift their cost functions down in the short run. B) Existing firms will raise price to cover the reduction in quantity demanded and maintain total revenue in the short run. C) Existing firms will reduce output in the short run. D) Market price will be above its original level.