Microeconomics and macroeconomics are:
A. not related because they are taught as separate courses.
B. interrelated because what happens in the economy as a whole is based on individual decisions.
C. virtually identical, though one is much more difficult than the other.
D. interrelated because both are taught by the same teacher.
Answer: B
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In the above figure, the demand for loanable funds curve is drawn for the average expected profit. If the real interest rate is constant at 6 percent and the expected profit falls, the amount of loanable funds demanded will be
A) less than $450 billion. B) $450 billion. C) between $450 billion and $600 billion. D) greater than $600 billion.
We call an economy that is self-contained and does not engage in any trade with outsiders a(n):
A. autarky. B. oligopoly. C. oligarchy. D. monarchy.
The demand curve for labor slopes down because
A) firms value less efficient workers less than they value more efficient workers. B) firms must lower prices to sell the additional units of its product that the extra workers produce. C) of the law of diminishing marginal product. D) of profit maximizing behavior.
How can a firm be made better off by limiting its options?
What will be an ideal response?