Which of the following is an example of an intermediate good?
a. a pair of jeans sold by a clothing retailer
b. cloth sold to a suit manufacturer
c. a share of Wal-Mart stock
d. a used Ford Mustang sold from one neighbor to another
b
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Recall the Application. If the Federal Reserve was making a decision on changing interest rates
A) the Board of Governors would typically make an equally good decision as would the chairman acting on his own. B) the Board of Governors would typically make a better decision than the chairman acting on his own. C) the chairman, acting alone, would typically make a better decision than the Board of Governors. D) neither the Board of Governors nor the chairman, acting alone, would tend to make accurate predictions.
When all variables start out at their long-run equilibrium levels, the most important determinant of long-run swings in nominal exchange rates is
A) a shift in relative money supply levels. B) a shift in relative money supply growth rates. C) a change in relative output demand. D) a change in relative output supply. E) a change in relative inflation rates.
The above figure shows the marginal benefit to a firm of polluting in the local river while producing its output, and the marginal cost to the surrounding neighbors. The marginal cost of production is zero for the firm
According to Coase's Theorem, which of the following scenarios is most likely to lead to the socially optimal level of pollution? A) The firm owns the river and there are a thousand surrounding neighbors. B) The firm owns the river and there is just one nearby neighbor. C) The river is jointly owned by one thousand surrounding neighbors. D) The firm owns the river, and therefore produces the social optimum no matter what.
For the monopoly in the above figure, if the firm is currently producing 700 units, which of the following is correct?
A) It could earn higher profits if it produced more units each day. B) It could earn higher profits if it produced fewer units each day. C) It is maximizing its profits. D) It is incurring a loss.