If a business owner decided to expand her business but rather than borrowing money from a bank used her own funds, then
A) she would be unable to earn a normal profit.
B) there is no cost associated with the expansion.
C) she would forego the opportunity to earn interest on the money.
D) the amount of her funds she used is an explicit cost.
E) the amount of her funds she used is part of her normal profit.
C
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When the price level rises, the quantity of real GDP supplied ________ because ________
A) increases; new businesses open B) increases; businesses fail and have to shut their doors C) decreases; businesses fail and have to shut their doors D) increases; AS curve shifts rightward E) decreases; new businesses open
In the long run, perfectly competitive firms make zero economic profit. This result is due mainly to which of the following assumptions?
A) few buyers and sellers B) unrestricted entry and exit C) firms must act as price takers D) demand for the firm's output is perfectly elastic
Improvements in the quality of consumer goods and services over time
a. cause inflation as measured by the CPI to overstate the actual inflation rate b. cause inflation as measured by the CPI to understate the actual inflation rate c. are accounted for in the CPI d. are insignificant and thus would not affect the CPI even if accounted for e. improve the accuracy and consistency of the market basket
Other things equal, one would predict that market wages would be relatively high when
a. the supply of labor is high. b. the demand for labor is low. c. the supply of labor is low. d. Both (a.) and (b.) are correct