Initially the beef and mutton markets are in equilibrium, then preferences shift away from beef and into mutton. If you are a cattle rancher, the best profit-maximizing strategy is to
A. shut down.
B. decrease output so as to minimize short run losses.
C. increase output so as to increase your market share.
D. shift some of your ranching capacity into cattle raising.
Answer: B
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A temporary decrease in government purchases would ________ the domestic real interest rate and ________ net desired saving (desired saving less desired investment) in the economy
A) lower; increase B) lower; decrease C) raise; increase D) raise; decrease
The growth rate of real computer investment ________ between 1987-95 and 1996-2000
A) fell from 18% to 5% B) fell from 34% to 7% C) rose from 3% to 22% D) rose from 21% to 35%.
According to the adaptive rationality standard, individuals:
A. are irrational if they choose to have preferences that are not self-interested. B. might rationally choose to have preferences that are not self-interested. C. always behave according to their own narrow self-interest. D. are unable to choose what kind of preferences to have.
The Nash Equilibrium outcome assures the maximum profit for firms.
Answer the following statement true (T) or false (F)