Don's Pasture Apple Cider Company buys four inputs: apples, glass bottles, apple presses, and computers for record keeping. If the company decides to become more vertically integrated, it will
a. probably start growing apples next
b. probably start making glass bottles next
c. probably start making apple presses next
d. probably start making computers next
e. have to grow apples and make glass bottles, apple presses, and computers
A
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Suppose the price of a product is less than its average variable cost. When the firm's fixed obligations are completely ended, it will now most likely:
a. make an economic profit. b. go out of business. c. expand to a bigger operation. d. continue to be shut down. e. break even.
At the beginning of a year, decision makers expect the general level of prices to increase at a 3 percent annual rate. The CPI increases from 150 to 154.5 during the year; this is an example of
a. an inflation rate that is equal to 4.5 percent. b. an unanticipated increase in the general level of prices. c. an increase in the general level of prices that was accurately anticipated. d. an inflation rate that is less than what people anticipated.
As real interest rates fall, firms desire to
a. buy more new equipment and buildings. This response helps explain why the supply of loanable funds is upward sloping. b. buy more new equipment and buildings. This response helps explain why the demand for loanable funds is downward sloping. c. buy less new equipment and buildings. This response helps explain why the supply of loanable funds is upward sloping. d. buy less new equipment and buildings. This response helps explain why the demand for loanable funds is downward sloping.
Which of the following is an example of excess supply:
A. Price = $500, demand = 500, supply = 300 B. Price = $700, demand = 300, supply = 500 C. Price = $600, demand = 400, supply = 400 D. Price = $400, demand = 600, supply = 200