The firm in the figure above is ________ that is equal to ________
A) making an economic profit; $5.14 × 7
B) making an economic profit; $3.00 × 7
C) incurring an economic loss; $5.14 × 7
D) incurring an economic loss; ($5.14 - $3.00 ) × 7
E) making an economic profit; ($5.14 - $3.00 ) × 7
D
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If a used-car dealer suffers economic losses, then
A) as a group, its customers were necessarily made worse off. B) as a group, its competitors necessarily enjoyed economic profits. C) it must pass its losses onto its future customers. D) none of the above is true.
In the late 1990s, debt-financed government spending decreased in Mexico. Following this decrease, consumption spending increased. Ricardian equivalence would explain this increase in consumption as the result of:
a. people's expectation of higher future taxes required to pay off government debt. b. people's expectation of lower future taxes that induce them to save less. c. automatic stabilization of the economy. d. the crowding out effect. e. an increase in current household disposable income.
Until the year _____, there was a clear line of demarcation between commercial banks and thrift institutions.
Fill in the blank(s) with the appropriate word(s).
Market economies rely on which of the following to allocate scarce resources?
a. government b. consumers c. relative prices d. real interest rates