People sometimes worry that American trade with other countries will lead to large U.S. trade deficits and the movement of massive amounts of American capital out of the country. This worry is unfounded because countries cannot
A) increase savings at the same time that a trade deficit grows.
B) spend more than they earn.
C) invest more than they save.
D) have both current account and financial account deficits at the same time.
E) increase their trade with other countries without increasing their savings.
D
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Joe quits his job as an insurance agent and opens his own sporting goods store. If his profits as measured by his accountant are greater than zero, then
A) he made a good move because he is earning above normal profits. B) his economic profit must be greater than zero. C) his opportunity costs must be zero. D) There is not enough information to determine his economic profit, if any.
The functioning of a market economy is very dependent upon investment for provision of capital and future growth. Describe the process of investment and employment of the created capital in production.
What will be an ideal response?
The production function does NOT provide information about
A. the types of inputs used in the production process. B. the relationship between changes in quantity of inputs and changes in the quantity of output. C. the profits of producing a good. D. the technology used in the production process.
Use the following cost table to answer the next question.OutputAverage Variable CostAverage Total CostMarginal Cost0---2$2.50$27.50$2.542.0014.501.562.0010.332.082.138.382.5102.307.303.0122.506.673.5143.006.576.0164.007.1311.0The table shows cost data for a perfectly competitive firm. If the market price for the firm's product is $6, what output level will the firm produce to maximize profits?
A. 16 B. 12 C. 0 D. 14