As of 2008, approximately what fraction of U.S. GDP does government purchases now represent?
a. One-half
b. Three-quarters
c. None; it is not included in GDP
d. Two-thirds
e. One-fifth
E
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In the Cobb-Douglas production function, the index of the overall level of efficiency of transforming capital and labor into real GDP is called
A) total factor productivity. B) allocative efficiency. C) the marginal efficiency index. D) the transformation allocation of inputs.
If the price of gloves increases, total expenditures on gloves will decline if
a. the demand for gloves is inelastic. b. the demand for gloves is elastic. c. the quantity of gloves purchased is unresponsive to changes in price. d. there are few good substitutes for gloves.
Which of the following is not a characteristic of monopolistic competition?
A) There are many buyers and sellers. B) There are low barriers to entry. C) Average revenue is equal to price. D) The products sold by all firms are identical.
Industries in which firms are enjoying positive profits are likely to ________ in the long run.
A. expand B. contract C. neither expand nor contract, as firms must earn an economic profit to stay in business D. expand or contract depending on the normal rate of return