The key mission that most economists ascribe to a firm's managers is to:
A. hire a large number of employees.
B. maximize the value of the firm.
C. follow all regulations.
D. maintain ethical behavior.
Answer: B
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In the above figure, when real disposable income equals 600
A) there is dissaving. B) real disposable income exceeds consumption. C) consumption is less than disposable income. D) consumption equals real disposable income.
Which of the following best explains why a firm in a perfectly competitive market must take the price determined in the market?
A. The short-run average total costs of firms that are price takers will be constant. B. If a price taker increased its price, consumers would buy from other suppliers. C. Firms in a price-taker market will have to advertise to increase sales. D. There are no good substitutes for the product supplied by a firm that is a price taker.
The cost of inflation to society includesI.The opportunity costs of resources used by people to protect themselves against inflationII.The costs associated with recalculating prices
A. I only B. II only C. Both I and II D. Neither I nor II
Assume that the government proposes a negative income tax that calculates the taxes owed as follows: taxes owed equal 30% of income less $12,000 . A family that earns an income of $40,000 will
a. neither pay taxes nor receive an income subsidy. b. receive an income subsidy of $3,600. c. pay $3,600 in taxes. d. pay $12,000 in taxes.