If the country of Heehee makes the transition from central planning to a market economy in a matter of months, it is an example of the big-bang approach
a. True
b. False
A
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Steve likes to buy comics and games every month. He recently got a pay raise, so he has $20 more to spend each month. If comic books are inferior goods and games are normal goods, then Steve will buy: a. more comics and games
b. more comic books but may buy the same or a smaller quantity of games c. more games but may buy the same or a smaller quantity of comics. d. the same amounts of games and comics.
An increase in the income-dependent portion of the consumption function would correspond to a
A. Movement along the consumption function to the right. B. Movement along the consumption function to the left. C. Shift of the consumption function downward. D. Shift of the consumption function upward.
Refer to the information provided in Figure 2.5 below to answer the question(s) that follow.
Figure 2.5Refer to Figure 2.5. For this economy to move from Point B to Point C so that an additional 20 OLED televisions could be produced, production of LCD televisions would have to be reduced by
A. more than 30. B. exactly 60. C. fewer than 30. D. exactly 30.
Suppose that a normal rate of return in the economy is 10% and the rate of return being earned by firms in a competitive industry equals exactly 10%. Which of the following is a correct prediction based on this information?
A. Firms already in the industry will want to expand to try to increase their rate of return. B. Firms in the industry will not undertake any investment projects other than to replace depreciating capital stock. C. The industry size will contract. D. New firms will want to enter this industry, as the existing firms are earning an economic profit.