The difference between a firm's revenue and its operating expenses is the firm's operating income
Indicate whether the statement is true or false
TRUE
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The above figure that most accurately shows a production function is
A) Figure A. B) Figure B. C) Figure C. D) Figure D. E) Both Figure A and Figure B; Figure A for an economy with an excess of labor and Figure B for an economy with a shortage of labor.
In the model of public goods, when the government chooses public goods provision optimally
A) there is no public goods production. B) public goods are provided in an amount equal to private goods. C) the marginal rate of substitution of private goods for public goods equals the marginal rate of transformation. D) GDP is maximized.
Suppose the economy is initially experiencing a recessionary gap. A reduction in the size of the budget deficit will cause which of the following in the short run?
A) a reduction in the size of the recessionary gap and increase in real GDP. B) an increase in the size of the recessionary gap and decrease in real GDP. C) an increase in inflation and increase in aggregate supply. D) an inflationary gap.
Which of the following is correct?
a. In unionized industries, wages are below the level that would prevail in competitive markets. b. The introduction of a union in an industry reduces the quantity of labor demanded in that industry, causes some workers in that industry to be unemployed, and reduces wages in the rest of the economy. c. There is a strong consensus among economists that unions are bad for the U.S. economy. d. All of the above are correct.