Which of the following is a short-run decision?
A. Because of an increase in enrollment, the economics department hires two new professors.
B. After a new classroom building is built, the economics department hires two new professors.
C. Your college builds a new classroom building.
D. The economics department buys new computers for the professors.
A. Because of an increase in enrollment, the economics department hires two new professors.
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The figure above illustrates a linear demand curve. If the price falls from $8 to $6
A) total revenue increases. B) total revenue decreases. C) total revenue remains unchanged. D) the quantity demanded increases by less than 20 percent.
Comment on the following statement: "I decided to buy a car from a dealer in a town 100 miles away because he was offering a price that was $100 lower than the dealer in my hometown. Therefore, I saved $100."
What will be an ideal response?
Refer to Figure 13-13. If the diagram represents a typical firm in the market, what is likely to happen in the long run?
A) Inefficient firms will exit the market and new cost-efficient firms will enter the market. B) New firms will enter the market causing the demand to decrease for existing firms. C) Competition will be intensified as firms strive to make long-run profits. D) Some firms will exit the market causing the demand to increase for firms remaining in the market.
According to the invisible hand principle, competitive markets generally
a. bring the self-interest of individuals into harmony with the efficient allocation of resources, even though centralized planning of economic activities is absent. b. bring the self-interest of individuals into harmony with the efficient allocation of resources when the behavior of individuals is directed by democratic centralized planning. c. require central direction; otherwise, the actions of self-interested individuals will conflict with the general interests of society. d. promote the economic welfare of self-interested producers at the expense of unorganized groups such as consumers and taxpayers.