Because of a major hurricane, gross domestic product for the first quarter of the calendar year falls by 10 percent. As a result, gross domestic income
A. also falls by 10 percent because they always have to be equal.
B. falls by more than 10 percent because incomes always vary more than GDP.
C. falls by less than 10 percent.
D. would not change since the time span is less than a year.
Answer: A
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When a firm increased its output by one unit, its AFC decreased. This is an indication that
A) the law of diminishing returns has taken effect. B) MC < AFC. C) AVC < AFC. D) the firm is spreading out its total fixed cost.
Refer to the above figure. The profit-maximizing price for this firm is
A) P1. B) P2. C) P3. D) P4.
The LookGood BePopular (LGBP) Clothing Company embarked on a new advertising campaign in which a group of young beautiful people are having fun eating out at a restaurant wearing the company's clothes. Critics of advertising argue that this advertisement
a. causes demand for LGBP Clothing to be less elastic. b. is more effective than other forms of advertisement because of its content. c. will cause the market to be more competitive. d. Both a and b are correct.
In considering consumers' attitudes toward fairness, which of the following have economists found to be true?
a. People are interested mainly in making themselves as well off as possible. b. People attempt to treat others fairly, even if doing so makes them worse off financially. c. People attempt to treat others fairly, but only if doing so makes them better off financially. d. People usually ignore fairness when making spending decisions.