Economics is the study of
A. how people spend their income.
B. why people want certain goods and services rather than other goods and services.
C. how people allocate their limited resources to satisfy their unlimited wants.
D. how to get rich.
Answer: C
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In a contestable market with one firm in the market, the existing firm will
A) set its price equal to the monopoly price. B) set its price lower than the monopoly price. C) set its price higher than the monopoly price. D) have a demand curve that is horizontal at the price that will attract new firms to enter the market.
Assume that an economy is in equilibrium when there occurs an increase in the supply of capital. The available quantity of labor remains fixed. Once the economy has adjusted to its new equilibrium, which of the following has increased?
A) the real wage B) the rental price of capital C) the share of capital income in national income D) all of the above E) none of the above
The reforms introduced by Congress in the 1930s led to:
A. the Great Crash. B. relative financial stability for over 70 years. C. a further decline that lasted for 25 years. D. the Great Depression to be worse than it needed to be.
To think at the margin means to consider:
A. how nothing remains constant over time. B. how a small change in one variable affects another variable. C. how people behave in their own self-interest. D. how people will decide what to purchase.