If a market is contestable, then
a. long-run economic profits are minimal due to inefficiency.
b. long-run economic profits are zero.
c. short-run and long-run economic profits are zero.
d. positive economic profits are maximized due to the efficient production spurred by the threat of entry.
b
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In an open economy, the relationship between GDP (Y) and expenditures is Y = C + I + G
Indicate whether the statement is true or false
The use of collateral
A) allows banks to charge higher interest rates on loans. B) makes it more costly for borrowers to take advantage of their asymmetric information. C) makes it more costly for lenders to take advantage of their asymmetric information. D) has important tax implications for both borrowers and lenders.
Use the following information to answer the next question.The following items describe the responses of four individuals to a Bureau of Labor Statistics (BLS) survey of employment.Mollie just graduated from college and is now looking for work. She has had three job interviews in the past month but still has not gotten a job offer.George used to work in an automotive assembly plant. He was laid off six months ago as the economy weakened. He expects to return to work in a few months when national economic conditions improve.Jeanette worked as an aircraft design engineer for a company that produces military aircraft until she lost her job last year when the Federal government cut defense spending. She has been looking for similar work for a year but no company seems interested in
her aircraft design skills.Ricardo lost his job last year when his company downsized and laid off middle-level managers. He tried to find another job for a year but was unsuccessful and quit looking for work.Which individual would be classified as a discouraged worker? A. Jeanette B. Ricardo C. George D. Mollie
Refer to Figure 4-7. The figure above represents the market for iced tea. Assume that this is a competitive market. If 20,000 units of iced tea are sold
A) the marginal benefit of each of the 20,000 units of iced tea equals $3. B) producer surplus equals consumer surplus. C) marginal benefit is equal to marginal cost. D) the deadweight loss is equal to economic surplus.