What does the complete diagram represent, the bottom half and the top half put together?
a. business cycle in general
b. the factor market
c. circular flow in a free market economy
d. household payments for the factors of production
Ans: c. circular flow in a free market economy
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Assume the economy is closed and that it is operating at full employment. Which statement is TRUE when the size of the budget deficit decreases?
A) The increased amount of public goods will crowd out privately produced goods. B) A reduction in the growth of productivity, and a reduction in society's standard of living will occur. C) The interest rate will decrease, leading to an increase in investment and capital formation. D) Demand and supply of credit will increase.
Which of the following is an infant-industry argument in favor of restrictions on foreign trade?
a. Foreign producers must be stopped from selling their products in this country below cost of production. b. Domestic workers must be protected from the lower wages paid in foreign countries. c. The nation's security demands we ensure an adequate domestic supply capacity of certain products. d. Do unto others as they do unto you. e. Industries in the early stages of development must be protected from more mature producers.
Which of the following represents the change in total cost that results from a one-unit increase in production?
A. Total revenue. B. Marginal revenue. C. Marginal cost. D. Marginal profit.
A monopolist will not earn any economic profits when
A) AVC is a minimum. B) AFC is very high. C) ATC lies above the demand curve. D) ATC lies below the demand curve.