Assume the technology for producing personal computers improves and, at the same time, individuals discover new uses for personal computers so that there is greater utilization of personal computers. Which of the following will happen to equilibrium price and equilibrium quantity? A) Price will increase; quantity cannot be determined. B) Price will decrease; quantity cannot […]
The suggestion that a seller will try to set price based on “what the market will bear” is explicit recognition of the constraint imposed by: A) the firm’s marginal cost of production. B) the price elasticity of demand for that item. C) the firm’s competitors. D) the need for most firms to earn positive economic […]
The difference between interest income or receipts earned on investments in the rest of the world by the residents of a given country and the payments to foreigners on investments they have made in a given country is called: A) unilateral transfers. B) net investment income. C) capital expenditures. D) none of the above. […]
Temporary tax cuts will have a greater influence on consumption expenditures than temporary tax cuts. Indicate whether the statement is true or false ANSWER FALSE
Assume the cost of certain inputs used to produce artificial Christmas trees increases and, at the same time, the economy moves into a recession, causing the incomes of consumers to decrease. Which of the following will happen to the equilibrium price and quantity of artificial Christmas trees? (Assume artificial Christmas trees are normal goods.) A) […]
Explain the difference between a cartel and tacit collusion. Is tacit collusion illegal in the United States? Explain. What will be an ideal response? ANSWER A cartel consists of a formal agreement among firms to coordinate their production and pricing decisions so as to maximize the joint profits of the cartel members. Cartels are […]
When stock prices fall A) an individual’s wealth is not affected nor is their willingness to spend. B) a business firm will be more likely to sell stock to finance investment spending. C) an individual’s wealth may decrease but their willingness to spend is not affected. D) an individual’s wealth may decrease and their willingness […]
The stock market is A) where interest rates are determined. B) the most widely followed financial market in the United States. C) where foreign exchange rates are determined. D) the market where most borrowers get their funds. ANSWER B
Lending abroad represents: A) a capital outflow. B) a capital inflow. C) positive net savings. D) none of the above. ANSWER A
An isoquant identifies all of the combinations of two inputs that result in the same total costs of production. Indicate whether the statement is true or false ANSWER FALSE
