Economic theory assumes that
What will be an ideal response?
individuals choose those actions from among the options available that they think will yield them the largest net advantage.
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In the short run, a competitive firm will
a. Will produce a quantity where AC = MR. b. Will produce a quantity where AVC = MR. c. Will produce a quantity where MC = MR. d. Will shut down if price falls below the minimum of average costs.
Christy is a telemarketer. She estimates that this summer, she has a 0.2 probability of earning $10,000, a 0.5 probability of earning $5,000, and a 0.3 probability of earning only $1,000. What is Christy's expected income?
A) $7,256 B) $5,333 C) $4,800 D) $4,000
Which of the following will NOT occur in the short run when the money supply decreases?
A. The interest rate will increase. B. The price level decreases. C. People will buy fewer goods and services. D. Aggregate supply decreases.
If the quantity demanded of personal computers increases by 5% every time the price of personal computers decreases by 10%, the price elasticity of personal computers is (remember to report the absolute value):
a) 4 b) 0.5 c) 1 d) 2