Suppose a firm earns an accounting profit. This means the firm also earns a positive economic profit
a. True
b. False
Indicate whether the statement is true or false
False
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Consider a competitive industry in which a "green" company uses a cleaner but costlier production method than is used by other firms. In the long run, the "green" company will:
a. earn more profit than will the typical firm in the industry. b. drive its competitors out of business. c. have economic losses and exit the industry. d. charge a higher-than-average price for its product.
Which of the following statements is correct?
a. The consumer price index is a measure of the overall level of prices, whereas the GDP deflator is not a measure of the overall level of prices. b. If, in the year 2011, the consumer price index has a value of 123.50, then the inflation rate for 2011 must be 23.50 percent. c. Compared to the GDP deflator, the consumer price index is the more common gauge of inflation. d. The consumer price index and the GDP deflator reflect the goods and services bought by consumers equally well.
What are net exports?
A. Exports minus imports B. Exports plus imports C. Imports minus exports D. That portion of consumption and investment goods sent to other countries
A consumer spends less time searching for a good when her reservation price is:
A. fixed. B. increased. C. reduced. D. None of the answers are correct.