If monopolistically competitive firms are earning economic profits, then in the transition to the long-run equilibrium:
a. more firms will enter the industry
b. prices will tend to fall.
c. each firm will produce a smaller quantity of output.
d. all of the above will occur.
d
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A business cycle is the period of time in which:
a. a business is established and ceases operations. b. there are four phases: peak, recession, trough and expansion. c. the price level varies with real GDP. d. expansion and contraction of economic activity are equal. e. none of these are true.
Which of the following would be an example or result of expansionary fiscal policy in action?
a. an increase in taxation b. a decrease in government purchases c. a budget deficit d. a budget surplus
Which of the following is an open market purchase?
a. When private individuals sell government bonds b. When the Fed sells government bonds c. When private individuals purchase government bonds d. When bond dealers buy government bonds from the fed e. When the Fed buys government bonds
The change in output due to one unit change in labor usage, the level of usage of other inputs remaining unchanged, is called:
a. the average product of labor. b. the total product of labor. c. the marginal revenue product. d. the marginal product of labor.