With average-cost pricing, the firm in Figure 8.14 would be:
A. making a zero economic profit.
B. losing money.
C. making a positive economic profit.
D. shut down.
Answer: A
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Describe the effects of an oil price shock in a Keynesian model; why are such supply shocks difficult to handle using macroeconomic stabilization policies?
What will be an ideal response?
Bubba is a shrimp fisherman who could earn $5,000 as a fishing tour guide. Instead, he is a full-time shrimp fisherman. In calculating the economic profit of his shrimp business, the $5,000 that Bubba gave up is counted as part of the shrimp business's
a. total revenue. b. explicit costs. c. implicit costs. d. marginal costs.
Exhibit 10-4 Aggregate supply and demand curves
In Exhibit 10-4, point E2 represents:
A. real GDP above full-employment GDP. B. real GDP that equals full-employment GDP. C. a depression. D. real GDP below full-employment GDP.
Which of the following is NOT one of a group of variables that make up the Index of Leading Indicators?
A. New building permits issued B. The unemployment rate C. Index of stock prices D. The money supply