The difference between zero accounting profit and zero economic profit is that
a. economists include opportunity cost in zero economic profit, while accountants do not include opportunity cost in zero accounting profit.
b. economists do not include opportunity cost in zero economic profit, while accountants do include opportunity cost in zero accounting profit.
c. economists include opportunity cost in zero accounting profit, while accountants do not include opportunity cost in zero economic profit.
d. economists do not include opportunity cost in zero accounting profit, while accountants do include opportunity cost in zero economic profit.
A
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If China decides to enact laws to clean up the environment, what would be the effect on GDP?
A) GDP would increase as the environmental costs of pollution were not included in the calculation of GDP. B) GDP would decrease if the pollution controls reduce productivity by more than the cost of the controls. C) GDP would increase as the citizens of China were made happier as the environment was cleaned up. D) GDP would increase reflecting the fact that the environment would be cleaner.
Economists use the term "ceteris paribus" to indicate that: a. the analysis is true for the individual but not for the economy as a whole
b. supply and demand are in balance. c. their conclusions are based on normative rather than positive economic analysis. d. other things are assumed to remain constant.
Before the Great Depression of the 1930s, most economists believed that
A. only active government policy could prevent recessions or inflation. B. a capitalist economy had a natural tendency to cure recessions or inflation. C. a capitalist economy had a natural tendency to inflation. D. recessions and depressions were inevitable until the economy broke down completely.
In the long run, a year-long drought that destroys most of the summer's wheat crops causes permanently:
A. higher prices. B. lower prices. C. lower output. D. None of these is true.