The use of macroeconomic policies to smooth or moderate the business cycle is known as
A. aggregate supply management.
B. discretionary policy.
C. automatic stabilization.
D. aggregate demand management.
Answer: D
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Bonzo's success in the Easter Basket business has attracted more characters into the Easter Basket industry. If Easter Basket making is a constant cost industry, Bonzo
a. and the new entrants can all expect to be enjoying his current level of profits. b. can expect his profits to be driven down to zero as new competitors push the price down. c. can expect to have to shutdown his operation in the face of new competition. d. will have to increase his price to make up for the loss of any sales to new competitors.
There are 9 firms in an industry with market shares in the table above. Calculate the HHI for the industry. What kind of market does this operate in and why?
What will be an ideal response?
The figure above shows a perfectly competitive firm. The firm is operating; that is, the firm has not shut down. The firm is
A) making an economic profit of $200. B) incurring a economic loss of $200. C) incurring an economic loss of $600. D) making zero economic profit.
At Revolution Doughnuts in Fort Collins, Colorado, a cup of coffee or a doughnut is $1. Suppose Hannah loves going to Revolution Doughnuts. She spends $5 a day at the shop on 3 doughnuts and 2 cups of coffee. Is Hannah maximizing her total utility?
A) No. B) Maybe, but I need to know more about Hannah's income. C) Yes. D) Maybe, but I need to know more about Hannah's marginal utility per dollar for each of the two goods.