In principle, households ultimately control:
A. businesses.
B. both businesses and the government.
C. neither businesses nor the government.
D. the government.
Answer: B
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With the self-correcting mechanism, if a negative demand shock occurs,
a. a decrease in wage rates will lead to a decrease in the price level so that the economy returns to full employment b. the price level will increase, causing equilibrium GDP to return to its original level c. the wage rate will eventually increase, restoring GDP to its full-employment level d. the price level will remain constant e. there will be no effect in the long run
Price leadership is an example of explicit collusion by oligopolies.
Answer the following statement true (T) or false (F)
Suppose Country A, a labor-abundant country, produces only drink and furniture. The following equations illustrate the prices and costs of drink and furniture in the country, where the numbers indicate the amounts of labor and land needed to produce a unit of drink and furniture. 'W' is the wage rate and 'r' is the rental rate of land.Price of drink = 1w + 2rPrice of furniture = 2w + 1rAccording to this information, which of the following statements is true?
A. Labor is used relatively intensively in the production of furniture. B. The opportunity cost of producing furniture is higher than the opportunity cost of producing drink in Country A. C. The inputs are used in the same proportion in producing both commodities. D. The land to labor ratio in the production of furniture is higher than that in the production of drink.
Marginal utility can be thought of as
A. the opportunity cost of buying the next good. B. the additional cost of that next good purchased. C. the incremental change in a person's total satisfaction level from the consumption of a good. D. the total change in satisfaction from buying a good.