The market system works by getting each person, motivated by his or her own self-interest, to produce products for other people.
Answer the following statement true (T) or false (F)
True
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The poverty line is based on the percentage of people who cannot afford an adequate diet
a. True b. False Indicate whether the statement is true or false
Economies of scale imply: (i) a continuously falling AC curve or (ii) a larger output is more efficient than a smaller output.
A. i and ii B. i but not ii C. ii but not i D. neither i nor ii
Loss aversion is the tendency to:
A. weigh gains more heavily than losses. B. dislike gains, but enjoy losses. C. enjoy gains, but dislike losses. D. weigh losses more heavily than gains.
Suppose that firms are located in a circle on an island. You are given transportation costs, fixed costs, variable costs, and demand (assume that customers are spread evenly along the circle). As the firm's variable costs rise,
A. the number of firms will rise in the long run. B. the number of firms will stay the same in the long run. C. the number of firms will fall in the long run. D. It is impossible to tell from the information given.