If, as an entrepreneur, I am earning accounting profits of $70,000 per year and the opportunity cost of my time is $50,000
A) I am earning economic profits of $20,000.
B) I am earning economic profits of $70,000.
C) I am earning economic losses of $20,000.
D) I should close my business.
Answer: A
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Which of the following is NOT a basis for the Taylor-rule guideline for how the Federal Reserve should set its target value for the federal funds rate?
A) the current deviation of the actual inflation rate from the Fed's inflation objective B) the gap between actual real GDP and a measure of potential real GDP C) an estimated long-run real interest rate D) the present deviation of the actual unemployment rate from the Fed's unemployment objective
Which of the following statements is false?
A. The list of stocks that are included in the Dow Jones Industrial Average changes from time to time, and is determined by the editors of the Wall Street Journal. B. The Dow Jones Industrial Average first appeared on the scene in 1896. C. When the Dow Jones Industrial Average was first computed, prudent investors bought bonds, not stocks. D. The Dow Jones Industrial Average is computed by summing the prices of the thirty stocks included in the average and dividing by 30.
In a perfectly competitive market, the price is currently above the minimum of each firm's long-run average total cost curve. Which of the following statements is correct?
a. The long-run average total cost curve will shift upward in the long run. b. Firms will alter their plant size in the short run. c. The market price will fall in the long run. d. The firms must be producing at an output level where price exceeds short-run marginal cost. e. The firms will earn above-normal profit in the long run.
Which of the following is true?
A) Voters have a strong incentive to cast a well-informed vote, but consumers have little incentive to make informed choices. B) Both voters and consumers have a strong incentive to make informed choices. C) Voters have little incentive to cast a well-informed vote, but consumers have a strong incentive to make informed choices. D) Neither voters nor consumers have much incentive to make informed choices.