The equation of exchange states that the money value of GDP transactions must be equal to the product of the average stock of money and velocity.
Answer the following statement true (T) or false (F)
True
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Suppose there are four firms in a market and each of them sell differentiated products. Does it make sense for these firms to engage in a price war? Why or why not?
What will be an ideal response?
"The U.S. government should not use my tax dollars to subsidize people on welfare"
A) is a positive economic statement because it simply describes one person's opinion. B) is a normative economic statement because it involves a value judgment about an economic policy. C) is a positive economic statement because it predicts that my tax dollars will go to welfare. D) is a normative economic statement because it is a scientific fact.
An information product is a product for which
A) the first item is produced inexpensively but additional units are more costly to produce. B) the first unit is very costly to make but additional units are less costly to produce. C) the marginal cost first falls and then rises but the average total cost rises throughout its range. D) the average fixed cost first falls and then rises, but the average total cost falls throughout its range.
As the wage rate increases, the income effect tends to reduce the quantity of labor supplied to the market
a. True b. False