In the circular flow of income
A) households demand goods and services that are supplied by firms, and the firms demand factors that are supplied by intermediate firms.
B) households demand goods and services that are supplied by firms, while supplying factors that are demanded by firms.
C) households sell goods and services while firms sell factors.
D) households buy goods and services while firms sell goods and services. Firms obtain labor from households, capital from government, and raw materials from other firms.
B
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The International Maritime Bureau said the waters off Somalia are the world's most dangerous, accounting for nearly a third reported pirate attacks worldwide. Suppose all boats are insured to $100,000 and pay a premium of $15,000 each
Suppose 10 out of 100 boats are attacked by pirates and these 10 file claims with their insurance. Has the insurance company earned an economic profit? A) Yes, they earned an economic profit of $500,000. B) Yes, they earned an economic profit of $50,000. C) No, they sustained an economic loss of $85,000. D) No, they broke even.
The existence of positive externalities due to the impossibility of full appropriability
A) supports the conclusions of the Heckscher-Ohlin model. B) rejects the usefulness of government protectionism. C) supports the concept that the government should support only high-tech industries. D) provides support for government protectionism. E) supports arguments for free trade.
Which of the following describes the difference between the demand faced by a firm and the demand faced by an industry?
A. The demand facing individual firms tend to be more price-elastic than those for the entire industry. B. The income elasticity of demand faced by a firm is higher than the income elasticity of demand faced by an industry. C. The elasticity of demand for a firm and for an industry is the same. D. The demand facing individual firms tend to be less price-elastic than those for the entire industry.
Fiscal policy affects the money market through its effect on
A) income and money supply. B) income and money demand. C) money supply and money demand. D) money supply and income.