Which of the following is the best definition of economics?
A. the study of how consumers spend their income
B. the study of how business firms decide what inputs to hire and what outputs to produce
C. the study of how individuals and societies choose to use the scarce resources that nature and previous generations have provided
D. the study of how the federal government allocates tax dollars
Answer: C
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Which of the following is a characteristic of a firm in a perfectly competitive market?
A) The firm must lower its price in order to increase quantity demanded. B) The firm cannot make a profit in the short run because it is too small a part of the total market. C) The firm can make a profit in the long run but not in the short run. D) The firm can sell as much as it wants without having to lower its price.
The "fooling" model was developed by economist
A) Milton Friedman. B) Edward Prescott. C) Robert Lucas, Jr. D) John Maynard Keynes. E) Charles Bogle.
A binding price floor causes a shortage in the market
a. True b. False Indicate whether the statement is true or false
An international financial crisis will likely occur when
A. the rate of money supply growth is not the same in all nations. B. newly-acquired political freedom in a country leads some interest groups to form a coalition limiting competition. C. many international investors look at the behavior of a few large investors to determine when funds should be withdrawn from a particular country. D. there is an increase in portfolio investment.