What is not true about interest income derived from loanable funds? It
a. is considered to be the profit due to an entrepreneur
b. originates in theft of property, according to Marxists
c. is the reward for an earlier decision to postpone consumption
d. is justified because savers have property rights to their savings and are entitled to the rewards they generate
e. is paid in the loanable funds market
A
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If one defines incremental cost as the change in total cost resulting from a decision, and incremental revenue as the change in total revenue resulting from a decision, any business decision is profitable if:
a. it increases revenue more than costs or reduces costs more than revenue b. it decreases some costs more than it increases others (assuming revenues remain constant) c. it increases some revenues more than it decreases others (assuming costs remain constant) d. all of the above e. b and c only
When self-correction works to eliminate an expansionary gap, _____
a. both money wages and real wages increase b. money wages increase while real wages decrease c. both money wages and real wages decrease d. money wages decrease while real wages increase e. money wages remain unchanged
The observation that interest rates are higher in years ending with a 1 or a 6 represents causality rather than association
a. True b. False Indicate whether the statement is true or false
Two firms would sometimes be better off if they got together and agreed to charge a high price, rather than to compete and risk having to charge a lower, competitive price. What is the greatest deterrent to this strategy?
A) The firms may find that the price they charge is greater than the price that would maximize their profits. B) An agreement by firms to charge high prices is illegal. The government can fine the firms and send their managers to jail. C) Consumers may resent having to pay high prices and not buy from either of the firms. D) One of the firms may decide to lower its price and take business away from the firm that charged the high price.