Refer to the diagram. At the profit-maximizing output, the firm will realize:
A. a loss equal to BCFG.
B. a loss equal to ACFH.
C. an economic profit of ACFH.
D. an economic profit of ABGH.
D. an economic profit of ABGH.
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In the above figure, the distance between points T and U represents
A) an expansion. B) a trough. C) a peak. D) a recession.
An unplanned increase in inventories results from
A) actual investment that is less than planned investment. B) an increase in planned investment. C) a decrease in planned investment. D) actual investment that is greater than planned investment.
If the 1989 salary in 2009 dollars is $147,951, how do we interpret this?
A. The salary earned in 1989 could have purchased the same amount of goods as $147,951 could buy in 2009.
B. It would take $147,951 in 2009 to buy the same amount of goods that was purchased in 1989 with $85,529.
C. Someone earning $85,529 in 1989 would be as well off if he were earning $147,951 in 2009.
D. All of these interpretations are correct.
Which of the following is a problem inherent in centrally planned economies?
A) Households and firms make poor decisions in choosing how resources are allocated. B) There is too little production of low-cost, high-quality goods and services. C) Production managers are more concerned with satisfying consumer wants than with satisfying government's orders. D) Exports tend to exceed imports.