In order to study how changing price affects consumer decisions, we must assume all other factors, such as income and the prices of other goods are constant. This assumption is best know as
A. ceteris paribus.
B. rationality.
C. behavioral economics.
D. normative economics.
Answer: A
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Since 1930 the period of highest government budget deficits for the U.S. took place in ________
A) the 1930s B) the 1940s C) the 1950s D) the 1980s E) the 1990s
A monopoly firm is charging the price the market will bear at a level of output where MC equals $6 and is increasing, MR equals $9, and average variable cost equals $5 . To maximize profits, the firm should: a. increase both output and price
b. increase output but decrease the price. c. decrease output and increase the price. d. decrease both output and price.
A recent breakthrough in the field of genetics will allow scientists to insert into banana trees a human gene that protects against deadly childhood diseases. This is an important breakthrough for some less-developed countries because they cannot afford the traditional vaccines for these diseases. What effect might this breakthrough have on these countries' aggregate supply curves?
Minimum wage laws
a. benefit all unskilled workers. b. create unemployment, but if demand is relatively elastic, the unemployment effects will be minor. c. may help the nonpoor, such as teenagers from wealthy families. d. reduce poverty by reducing unemployment.