Which of the following is not correct?
a. Economics is a study of the choices that people make and the resulting interactions they have with one another.
b. In areas it has already studied, economists have found perfect and unchanging answers.
c. Economists are trying to expand their understanding of human behavior and society.
d. The economics of asymmetric information, political economy, and behavioral economics are all topics at the frontier of microeconomics.
b
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Mr. Jones, an elderly man living on his retirement, pulls $100,000 from certificates of deposit (CDs), which were returning an annual rate of return of 5%
He thinks the credit freeze is over and stock markets are headed up, but ends up losing 40% in his first year of investing. What was Mr. Jones's rate of economic profit? A) 5% B) 35% C) -35% D) -40% E) -45%
An important distinction between the labor market and the market for commodities is:
a. that contracts are arrived at more easily in the former. b. the individual attributes of the buyer and seller hold far more importance in the former case. c. that it is impossible to prevent breach of contract in the labor market. d. that the market for commodities is a matching market while the former is not.
Why do many firms base incentive pay on group performance?
What will be an ideal response?
In perfectly competitive markets, an implication of entry and exit in response to economic profit and loss is that:
A. firms will produce the quantity that minimizes average variable costs in the short run. B. market demand is completely elastic. C. firms will produce the quantity that minimizes average total costs in the long run. D. firms must earn positive economic profit in the long run.