Your purchase in a downtown Cincinnati leather shop of an Italian-made Gucci purse would be classified in the U.S. GDP accounting as
a. an addition to inventory
b. an investment good
c. a domestic good
d. an import
e. an export
D
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In a free market, the market price and quantity in the above figure will adjust to equilibrium values of
A) $1 per gallon and 50 million gallons. B) $4 per gallon and 10 million gallons. C) $2 per gallon and 60 million gallons. D) $2 per gallon and 30 million gallons.
Suppose at the current level of labor used, MRP = $100 and MFC = $150. To maximize profits, the firm should
A) hire more labor. B) reduce the level of labor. C) maintain the current level of labor. D) expand production.
The level of an economic activity should be increased to the point where the ____ is zero
a. Marginal cost b. Marginal benefit c. Net marginal cost d. Net marginal benefit
Financial intermediaries
a. harm both borrowers and lenders because they pay lenders a lower rate of interest than they charge to borrowers b. specialize in assembling loanable funds from households and firms, and channeling those funds to other households, firms, and government agencies c. are all depository institutions d. increase the risk of lending and borrowing because a financial intermediary has nothing to lose from such transactions e. reduce efficiency because they add an extra step to many financial transactions