When the price of an asset is growing rapidly, speculators:
A. usually look for other investment opportunities.
B. have a strong incentive to sell the asset before its price gets even higher.
C. often rush to buy the asset in the hopes of selling it later at a profit.
D. typically refrain from buying the asset because they know its price will eventually fall.
Answer: C
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The vertical axis in a graph
A) is named the y-axis. B) is named the x-axis. C) is not used in a scatter diagram. D) has no origin.
If the quantity of textbooks supplied is 10,000 per year and the quantity of textbooks demanded is 8,000 per year, there is a ________ in the market and the price will ________
A) shortage; rise B) shortage; fall C) surplus; rise D) surplus; fall
John Maynard Keynes argued that if many households decide at the same time to increase saving and reduce spending
A) the economy will benefit in the short run and benefit by an even greater amount in the long run. B) this will have a major negative impact on the economy in both the short run and in the long run. C) this may benefit the economy in the long run, but could be counterproductive in the short run. D) this may benefit the economy in the short run, but not in the long run.
The above figure shows the short run cost curves for a typical firm in a competitive market. If price = 4, then the firm
A) is earning positive profits. B) should produce 35 units. C) should shut down. D) None of above.