Explain the relationship between potential GDP and real GDP in the United States since the early 1960s. You do not need to tell what happened during any specific year; just describe the general relationship
What will be an ideal response?
Potential GDP has grown over the period, albeit at a slower rate over the past 3 decades, while the level of real GDP has fluctuated around potential GDP throughout.
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Elly needs to get her leaking faucet repaired as soon as possible. She gets in touch with a plumber who asks for an unreasonably high fee. If no other plumber is available for work, who has a higher bargaining power? Explain your answer
What will be an ideal response?
Figure 5-17
Which of the following statements about Figure 5-17 must be correct?
A. The consumer pays a higher dollar price per unit for good Y at A than at D. B. The consumer pays the same dollar price per unit for good Y at A and at B. C. The consumer pays a higher dollar price per unit for good X at D than at A. D. The consumer pays a higher dollar price per unit for good X at A than at C.
A perfectly competitive ebook publishing firm currently sells its ebook at the market price of $6. Its average total cost is $5.50. In this case:
a. since average total cost is less than the price, the firm will shut down. b. the firm has positive economic profits. c. the firm is losing money but will continue to operate. d. the firm has zero economic profits.
The marginal revenue of a monopolistically competitive firm
A) cannot be negative because the price the firm charges will always be greater than zero. B) can be negative if the firm charges a high price. C) can be negative if the firm charges a low price. D) will equal average revenue.