The Santa Fe Spark Plug Company supplies spark plugs to automotive parts dealers. An increase in the demand for its product led Santa Fe to hire 150 new workers
Santa Fe also plans to expand the capacity of its plant but this project will take 2 years to complete. Which of the following statements is true?
A) The long run for Santa Fe is longer than 1 year.
B) The wages and benefits paid to the new workers are implicit costs.
C) In the short run Santa Fe's variable costs increase but its fixed costs decrease.
D) The short run for Santa Fe is 1 year.
A
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A decision tree is used when modeling:
A. simultaneous decisions. B. any type of game. C. games in which timing matters. D. a prisoner's dilemma.
Crowding out can occur when a government budget ________ raises the real interest rate and the equilibrium quantity of investment ________
A) surplus; increases B) deficit; increases C) surplus; decreases D) surplus; does not change E) deficit; decreases
An increase in demand and a decrease in supply cause which of the following?
a. equilibrium price change is indeterminate b. equilibrium quantity decreases c. equilibrium price falls d. equilibrium price rises e. equilibrium quantity increases
The federal bank of Plutonia raises the discount rate from 4 percent to 5 percent. Which of the following is likely to be a consequence of such an action? a. Banks will lend aggressively, increasing the money supply in the economy
b. Banks will reduce the amount of loans, reducing the money supply in the economy. c. Banks will increase the amount of loans, reducing the money supply in the economy. d. Banks will lend aggressively, reducing the money supply in the economy.