When an economist points out that you and millions of other people are interdependent, he or she is referring to the fact that we all
a. rely upon the government to provide us with the basic necessities of life.
b. rely upon one another for the goods and services we consume.
c. have similar tastes and abilities.
d. are concerned about one another's well-being.
b
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What will happen when there is a rightward shift in the demand curve?
A) The product price will instantaneously adjust downward. B) Product prices do not change in this situation. C) Producers will decrease the product price. D) A new, higher price is not instantaneously achieved, but the price will rise over time.
A company finds that at the output level at which marginal cost equals marginal revenue, TC = $500, TVC = $400, and TR = $450. Your advice to the firm is
A) shut down, as TC > TR. B) reduce output to reduce the cost of production. C) increase output to reduce the per unit cost of production. D) continue to produce because loss is less than TFC.
Modern banks in the United States can keep reserves as:
A. commodity money only. B. a deposit at the Federal Reserve. C. gold. D. in accounts with other banks.
What can we conclude about our future after reading Chapter 1?
a. We will use up more resources faster and scarcity will become increasingly more severe. b. We will eventually run out of "things we want" causing scarcity to moderate. c. We will eventually run out of "things we want" causing scarcity to disappear. d. Resources will remain scarce and our wants unlimited so that scarcity will remain a fact of life. e. Technology will fully substitute for scarce resources so that even though our wants are unlimited, we will eventually eliminate scarcity.