The short run is characterized by:
A. increasing, but not diminishing, returns.
B. at least one fixed resource.
C. zero fixed costs.
D. plenty of time for firms to either enter or leave the industry.
Answer: B
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Based on the table above which shows Chip's costs, if rice sells for $600 a ton, Chip will
A) shut down because he incurs an economic loss. B) shut down because the price is below his minimum average variable cost. C) stay open because he makes an economic profit. D) stay open because the price is above his minimum average variable cost.
The "police power" of government to control business
(a) was exercised during the colonial period but lapsed when the Constitution was written. (b) was exercised during the colonial period and carried over to the new nation; it still exists today. (c) was not widely exercised during the colonial period but assumed greater importance in the new nation. (d) was important in England but was never important in the Americas, either before or after the Revolution.
What is "adverse selection"?
What will be an ideal response?
The demonstration effect suggests that people will save less when they
A. recognize that the real interest rate has increased. B. base their saving decisions on their projections of income and spending needs over their lifetime. C. base their spending decisions (and consequently their saving decisions) on spending decisions of others who spend more than they do. D. control their spending in order to save more when the real interest rate increases.