Individuals will make choices to maximize their:
A. values.
B. constraints.
C. utility.
D. income.
Answer: C
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Assume that the supply curve is horizontal because marginal cost is constant at $10. John, Robert, and Jimmy each value one compact disc at $20 but only Jimmy and John value a second compact disc (Jimmy at $5 and John at $15). It follows that the optimal number of compact discs sold in this market is
a. two. b. three. c. four. d. five.
The Bureau of Labor Statistics counts as employed people who work part-time, but would prefer to work full-time. Suppose the people who had part-time jobs, but wanted full-time jobs, were counted as unemployed
Explain how the unemployment rate and the labor force participation rate would change.
In early 2007, Pioneer and JVC, two Japanese electronics firms, each announced that their profits were going to be lower than expected because they both had to cut prices for LCD and plasma television sets
Which of the following could explain why these firms did not simply raise their prices and increase their profits? A) The firms are still making profits, just not as high as expected so there is room to lower prices until one can force the other out of business. B) The move to cut prices is probably just a temporary one to gain market share. In the long run the firms will raise prices and be able to increase their profits. C) Most likely, intense competition between these two major producers probably pushed prices down. Thereafter, each feared that it would lose its customers to the other if it raised its prices. D) In perfect competition, prices are determined by the market and firms will keep lowering prices until there are no profits to be earned.
Between 2007 and 2008, the United States economy experienced
A. disinflation. B. deflation. C. inflation. D. a depreciation.