A perfectly competitive firm earns an economic profit when:
a. price is above average variable cost.
b. price is above average total cost.
c. total cost exceeds total revenue.
d. total variable cost exceeds total revenue.
Ans: b. price is above average total cost.
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Economists have found evidence that differences in wages can be explained by
a. experience b. job characteristics c. physical attractiveness d. All of the above are correct.
Refer to the accompanying figure. For the nation whose PPC is shown, it must be true that:
A. the nation's productive resources are better-suited to making milk than to making movies. B. some of the nation's productive resources are better-suited to making milk, and some are better-suited to making movies. C. the nation's productive resources are better-suited to making movies than to making milk. D. the nation has a comparative advantage in making milk.
Dierdre just gave birth to twins and now finds herself buying diapers on a weekly basis. Therefore, we can conclude that there is a causal relationship between having newborn twins and purchasing diapers for Dierdre.
Answer the following statement true (T) or false (F)
In the IS-LM-PC model, which of the following is assumed to be exogenous?
A) G B) C C) I D) Y