A person who can produce more of a good than another person is said to possess a comparative advantage
a. True
b. False
B
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What is the difference between accounting profits and economic profits? Which of the two concepts is more appropriate for explaining decisions made by entrepreneurs? Explain
What will be an ideal response?
The commercial banking system has excess reserves of $200,000. Then new loans of $800,000 are subsequently made, and the system ends up just meeting its reserve requirements. The required reserve ratio must be:
A. 10 percent B. 20 percent C. 25 percent D. 30 percent
In the Keynesian model with efficiency wages
A) the full-employment line is determined where the quantity of labor demanded equals the quantity of labor supplied. B) the full-employment level is determined at the intersection of the labor demand curve and the efficiency wage line. C) an increase in labor supply increases employment. D) a decrease in labor supply shifts the FE line to the left.
In competitive price-searcher markets, short-run economic profits will lead to
a. long-run economic profits. b. the exit of firms from the market and the eventual restoration of zero long-run economic profits. c. the entry of additional firms into the market and the eventual restoration of zero long-run economic profits. d. the entry of additional firms into the market, which increases the demand for the product of each firm in the market.