Factors of production are the most likely to earn economic rent when they:
A. are used by many different firms.
B. are fixed in the short run.
C. have high reservation prices.
D. cannot easily be duplicated.
Answer: D
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In 1984, the base year, GDP was 3000. In 1988 the GDP deflator was 98. We may conclude that
A. there was some inflation between 1984 and 1988. B. there was some deflation between 1984 and 1988. C. real GDP declined between 1984 and 1988. D. GDP declined between 1984 and 1988.
The basic goals of total utility maximization, total profit maximization, and total welfare maximization explain most market activity.
Answer the following statement true (T) or false (F)
Other things equal, if a change in the tastes of American consumers causes them to purchase more foreign goods at each level of U.S. GDP, then:
A. unemployment will decrease domestically. B. U.S. real GDP will fall. C. inflation will occur domestically. D. U.S. real GDP will rise.
You and your sister are splitting a pizza. You cut it in half and your sister selects her half first. Thus, you cut it into two equally sized pieces. This is an example of
A. communism. B. utilitarian justice. C. Rawlsian justice. D. a public good.