Firms
a. are where entrepreneurs combine resources
b. are economic units formed by profit-seeking entrepreneurs
c. are assumed to try to maximize profit
d. reward entrepreneurs with profits, which are sales revenue minus the cost of production
e. All of the answers are correct.
E
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What two measures of macroeconomic activity are often referred to as the "twin deficits"?
A) the budget deficit and the trade balance B) net capital flows and net exports C) the foreign exchange deficit and net foreign investment D) the saving-investment deficit and the export deficit
Opportunity cost is the __________ alternative forfeited when a choice is made
A) least-valued B) most highly-valued C) most convenient D) most recently considered
What characteristic of a perfectly competitive firm that causes it to be a price taker?
A. many buyers and sellers B. homogeneous product C. free entry and exit D. Both many buyers and sellers and homogeneous product are correct.
Regarding open economies, economists tend to find evidence that
A. the more closed an economy is, the higher the rate of growth the economy will experience. B. open economies tend to have access to smaller markets than do closed economies. C. free trade encourages a more rapid spread of technology, and hence increases economic growth. D. trade tariffs tend to improve economic growth.