What two groups of decision makers are represented in the basic circular flow model?
A) governments and financial institutions
B) lenders and borrowers
C) wholesalers and retailers
D) bankers and regulators
E) households and firms
E
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If an increase in income leads to an increase in the demand curve for sailboats, this will lead to
A. higher prices of sailboats. B. lower prices of sailboats. C. a corresponding shift in the supply curve for sailboats. D. reduced output of sailboats. E. no change in the price of sailboats.
The rule-of-thumb among many economists suggests that a 10% increase in the minimum wage results in a ________ in the number of jobs held by teens.
A. 1% to 3% drop B. 1% to 3% increase C. 10% to 15% increase D. 10% to 15% drop
When a shortage exists in a market
A) the market clearing price is above equilibrium and market forces will cause the price to fall. B) the quantity demanded is less than the quantity supplied at the existing price. C) the current price is below the market clearing price and the price will rise. D) the quantity supplied is greater than the quantity demanded at the current price.
A firm can capture value through market power or through superior factors of production. The rent earned through the use of superior factors of production is
A. Bushian rent. B. monopoly rent. C. Ricardian rent. D. housing rent.