Which of the following is TRUE regarding markets? I) Economists define a market as a geographic location where trade occurs. II) A market enables buyers and sellers to get information about each other and to buy and sell from each other

You sign a contract to pay $1000 next year for the refrigerator you bought today. The rate of inflation is 10% and the real interest rate is 7%. Alternatively, you could pay $875 today. What should you do to save the most money?

What will be an ideal response?

A profit-maximizing firm would

a. consider opportunity costs rather than accounting costs when making decisions about output. b. expand current output if the revenues expected from doing so were less than the expected costs. c. enlarge its current plant size if present depreciation costs were less than average variable costs. d. increase output in the next period if accounting profits during the previous period were positive.