Macroeconomists are more likely than microeconomists to deal with:
A. positive analysis.
B. individual firms.
C. the scarcity principle.
D. aggregation.
Answer: D
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Mario's Pizza and Bella's Pizza are in tacit collusion to cooperate and each charge a high price for their pizzas. If Mario's Pizza initially cooperates with Bella's Pizza, but then switches and charges a low price and Bella's Pizza responds by forever charging a low price, this is an example of ________.
A) a trigger strategy B) a tit-for-tat strategy C) a one -shot game D) an end-period problem
A bank's required reserves are either held as vault cash or:
a. used to purchase Treasury bonds. b. deposited with the Fed. c. invested in the stock market. d. loaned out to other commercial banks.
Jenny sells lemonade in front of her house in the summer. Several other kids in Jenny's neighborhood also run lemonade stands in the summer. Suppose that the first week of summer, Jenny charged 25 cents for an 8-ounce cup of lemonade, her next-door neighbor Sam charged 50 cents for an 8-ounce cup of lemonade, and Alex across the street charged 15 cents for an 8-ounce cup of lemonade. Assuming the market for lemonade is perfectly competitive, what is most likely to happen?
A. A price war will break out, and all of the kids will lower their prices. B. Each kid will keep his or her price at the original amount. C. Eventually prices will equalize across all three lemonade stands. D. Everyone will start to charge 50 cents to maximize revenue.
The ________ of the 1968 tax surcharge led to the prominence of the developer of the permanent-income hypothesis that predicted it, ________
A) success, Walter Heller B) success, Milton Friedman C) failure, Walter Heller D) failure, Milton Friedman