According to economic theory, social interactions are the result of
A) calculated choices by individuals
B) chance and the laws of probability.
C) genetic and environmental factors.
D) random occurrences.
A
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The expected rate of inflation is built into current nominal rates of interest.
a. true b. false
Figure 10-4
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In Figure 10-4, if full employment occurs at 5,000 and the price level is currently 130, then we can expect the
A. aggregate supply curve to shift to the left until a new equilibrium is established at an output level of 4,000. B. aggregate demand curve to shift to the right until a new equilibrium is established at an output level of 6,000. C. price level to fall to 110. D. aggregate demand to shift to the left and aggregate supply to shift to the right until the price level reaches 130.
One reason why the Soviet Union grew slowly in the 20th century compared to the United States and Western Europe was that it:
A. licensed too many private enterprises, creating destructive competition. B. invested in too many consumer goods. C. did not invest as much in capital goods. D. did not provide incentives for individuals to produce what consumers valued.
Answer the following questions true (T) or false (F)
1. If a monopolist's price is $50 and average total cost is $43, then the average profit is $7. 2. If a monopolist's marginal revenue is $15 per unit and its marginal cost is $25, then to maximize profit the firm should decrease output. 3. In the short run, even if a monopoly's total revenue does not cover its variable costs, it should continue to produce because ultimately in the long run, the monopoly will start earning profits.