If your professor decided to give all of his students the highest grade in the class, would that affect your classmates' incentives to study?
What will be an ideal response?
If every student were given the same grade irrespective of how he or she did on an exam, students' incentive to study. Even without studying, a student would be ‘guaranteed' a higher grade than he would have received otherwise. Eventually, one can expect students in the class to stop studying altogether.
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The above figure shows a perfectly competitive firm. If the market price is more than $20 per unit, the firm
A) will definitely shut down to minimize its losses. B) will stay open to produce and will make zero economic profit. C) will stay open to produce and will incur an economic loss. D) will stay open to produce and will make an economic profit. E) might shut down but more information is needed about the fixed cost.
The BP schedule shows the combinations of the interest rate and income
a. that clear the goods market. b. that leads to equilibrium in the balance of payments. c. that equate supply and demand in the foreign exchange market at a given exchange rate. d. and is always positively sloped. e. both b and d.