When economic profit is positive,
A. the firm's owners experience a decrease in their wealth.
B. total revenue exceeds total economic cost.
C. the firm's owners have successfully solved the principle-agent problem.
D. foreign companies experience loss of market share
Answer: B
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Assume someone organizes all farms in the nation into a single-price monopoly. As a result, the amount of food produced
A) remains constant. B) decreases. C) increases. D) might increase or decrease depending on whether the demand for food is elastic or inelastic. E) might increase or decrease depending on whether the monopoly's marginal revenue curve lies below or above its demand curve.
According to your authors, the "Great Recession" that began in 2008 is evidence of
A) an unstable free market system. B) rampant greed among entrepreneurs. C) a cluster or accumulation of errors. D) antagonistic interests among the propertied and nonpropertied classes. E) all of the above.
Comparing fixed to flexible exchange rate, the response of an economy to a temporary fall in foreign demand for its exports is
A) output actually falls less under fixed rate than under floating rate. B) output actually falls more under fixed rate than under floating rate. C) output actually remains the same under fixed rate than under floating rate. D) the currency value grows in a fixed rate system and falls in a flexible system. E) output grows in a fixed rate system and falls in a flexible system.
Answer the following statement(s) true (T) or false (F)
1. Between 2000 and 2006, many mortgage-backed securities were given AAA ratings. 2. In 2005–2006, the Fed lowered interest rates. 3. Zero down payment mortgages led to fewer foreclosures. 4. Housing construction grew rapidly from 2006 to 2008. 5. The Dodd-Frank Act requires mortgage brokers to document applicants’ income, credit history and job status