When the demand for a monopolist's output falls, the monopolist will
a. not change the price, since it has no competition.
b. raise the price in order to compensate for the lower demand.
c. charge a lower price.
d. cut its costs in order to maintain its profit margin.
C
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When people buy assets simply because they believe the assets will appreciate and can be sold for a profit, it may cause:
A. a recession. B. unemployment. C. inflation. D. an asset-price bubble.
Tom is a castaway who washes up on a remote island. He can kill eight birds per hour or catch ten fish per day. The natives on the island can kill ten birds per day or catch twenty fish per day. According to comparative advantage, a. Tom should kill more birds and fish less, then trade birds for fish. b. Tom should kill fewer birds and fish more, then trade fish for birds. c. Both, Tom should
kill more birds and fish less. d. Both, Tom should kill fewer birds and fish more.
Between 1960 and 1973 the poverty rate ___; between 1973 and 1983 the poverty rate ___.
A. rose; rose B. fell; fell C. rose; fell D. fell; rose
In constructing models, economists:
A. make simplifying assumptions. B. include all available information. C. must use mathematical equations. D. attempt to duplicate the real world.