Which of the following is an example of the rationing function of price?
A. A firm attempting to lower its explicit costs.
B. Bill Gates purchasing the Mona Lisa for $5 billion.
C. Government price controls.
D. Switching from a Ph.D. in economics to one in finance because finance salaries are higher.
Answer: B
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In the recent Global Economic Crisis, the growing unwillingness of banks and non bank financial institutions to grant loans caused
A) LM curve to shift to the right. B) LM curve to shift to the left. C) IS curve to shift to the left. D) LM curve to shift to the right.
The widespread fall in the prices of homes caused consumers to:
A. decrease their spending, as they struggled to pay back debt. B. increase their spending, as they devoted their money to things other than homes. C. decrease their spending, and increase their debts. D. increase their spending, as saving was viewed as a bad investment.
Assume that a purely competitive firm uses two resources, labor (L) and capital (C), to produce a certain product. In which situation would the firm be maximizing profit?
A. Case A
B. Case B
C. Case C
D. Case D
A study indicated that transformational leadership of teams influenced work group effectiveness.
Indicate whether the statement is true or false.