Under perfect competition, the firm must decide
A. the best rate of output it should produce.
B. the best price to charge for its product.
C. the optimal level of advertising to engage in.
D. the optimal level of quality and the packaging that will maximize profits.
Answer: A
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Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
What most accurately describes what happened to earnings in the US between 1914 and 1920?
a. Both nominal and real earnings increased substantially. b. Nominal and real earnings dropped significantly as the World War I triggered a recession. c. Nominal earnings increased slightly, but real wages decreased because of the large inflation. d. A period of deflation led real earnings to increase even though nominal earnings had decreased slightly.
Which of the following is included in GDP?
a. the market value of rental housing services, but not the market value of owner-occupied housing services. b. the market value of owner-occupied housing services, but not the market value of rental housing services c. both the market value of rental housing services and the market value of owner-occupied housing services d. neither the market value of owner-occupied housing services nor the market value of rental housing services.
The biggest problem thwarting economic growth in the poorest countries, compared to the richest countries, is:
A. a legal and/or political environment unfavorable to economic growth. B. outdated physical capital. C. insufficient human capital. D. no access to technology.