A rising budget deficit created through government spending may result in a fall in domestic investment, a rise in private savings, or a rise in the _________ deficit.
a. economic
b. trade
c. government
d. savings
b. trade
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During a recession, unemployment rises and total output of the economy rises.
Answer the following statement true (T) or false (F)
If a firm has excess capacity, it
A) produces less than its efficient scale. B) should advertise to maximize profits. C) should decrease its markup to increase its profit. D) is a perfectly competitive firm. E) must face a horizontal demand curve.
The figure above shows the costs for a grower in the perfectly competitive turnip market. If the price is $1,200 for a ton of turnips, the firm is
A) making an economic profit. B) making zero economic profit. C) incurring an economic loss. D) More information is needed to determine if the firm is making a positive economic profit, zero economic profit, or incurring an economic loss.
The law of supply states that other things being equal
A) supply creates its own demand. B) supply will increase if productivity increases. C) as price increases, quantity supplied increases. D) supply will increase to meet demand if demand increases.