You use $50,000 of your own money to start an espresso stand. During the first year you earn a 10% return on that investment. If the current interest rate on savings is 8%, you earn an economic profit of
A. -$4,000.
B. $1,000.
C. $4,000.
D. $5,000.
Answer: B
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Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output B. D; an expansionary C. B; recessionary D. D; a recessionary
The most restrictive form of affirmative action
A) makes potentially qualified workers aware of a particular job opening. B) suggests that jobs be offered to the equally qualified but disadvantaged candidate. C) is a quota. D) suggests that the labor pool be representative of the community of qualified applicants.
A price ceiling is ______ if it is set _____ the market equilibrium price
A. efficient and fair; below B. unfair but efficient; equal to C. efficient and unfair; above D. inefficient and unfair; below
If there are no profits in competitive equilibrium, why do firms produce? How can they stay in business?
What will be an ideal response?