To say people respond to incentives means that people may alter their decisions when the costs and benefits of an action change
a. True
b. False
Indicate whether the statement is true or false
True
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The law of diminishing marginal product holds so long as the input is not a Giffen good.
Answer the following statement true (T) or false (F)
A decrease in demand and an increase in supply will lead to
A) unambiguous increases in both price and quantity. B) unambiguous decreases in both price and quantity. C) an unambiguous decrease in price, but the effect on quantity is indeterminate. D) an unambiguous decrease in quantity, but the effect on price is indeterminate.
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.
Refer to the diagram. At P 1 , this firm will produce:
A. 47 units and break even.
B. 47 units and realize an economic profit.
C. 66 units and earn only a normal profit.
D. 24 units and earn only a normal profit.