Jake, Sr. sells the family business, a factory that produces snake oil, to Jake, Jr., for $100, even though the factory has been assessed at $400,000. How will this transaction affect GDP?
A. Investment will increase by $100.
B. Investment will increase by $400,000.
C. Consumption will increase by $400,000.
D. GDP will not be affected by the transaction.
D. GDP will not be affected by the transaction.
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Why do economists use graphs?
What will be an ideal response?
Child poverty is
A. much more of a problem in France, Germany, and Japan than it is in the U.S. B. less of a problem in the United States than in Canada, Britain, or Italy. C. more of a problem in Sweden, Denmark, and Ireland than it is in the U.S. D. much more of a problem in the U.S. than in virtually all other industrialized countries.
The manager of a perfectly competitive firm has to decide:
A) the quantity of output the firm should produce. B) the price the firm should charge for its output. C) the quantity of output the firm should produce and the price it should charge. D) neither the quantity of output the firm should produce nor the price it should charge because the market makes both of these decisions.
Why is it considered "ideal" for price to just equal marginal cost?