A perfectly competitive firm incurs a loss in the short run, if at the profit maximizing level of output:
a. the marginal revenue curve lies below the marginal cost curve.
b. the marginal revenue curve lies above the average revenue curve.
c. the average cost curve lies below the average revenue curve.
d. the average revenue curve lies below the average cost curve.
e. the marginal revenue curve lies above the marginal cost curve.
d
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An increase in government expenditure can ________ potential GDP and an increase in taxes can ________ potential GDP
A) increase; never change B) increase; increase C) decrease; decrease D) never change; never change E) increase; decrease
Steve owns a motorcycle valued at $5,000 and that is his only asset. There is a 5 percent chance that Steve will have an accident within a year. If he does have an accident, his motorcycle is worthless
Steve's utility of wealth curve is shown in the figure above. An insurance company agrees to pay Steve the full value of his motorcycle in case of an accident if he buys the company's insurance policy. The company's operating expenses are $500 per policy. What is the minimum premium that the insurance company will accept? A) $1,000 B) $2,000 C) $500 D) $1,500
When the production process extends over more than one year, the value of the final product is:
A. included in GDP for the year in which production began. B. included in GDP for the year in which production was completed. C. allocated equally to GDP in each year. D. allocated to GDP in each year according to the value added in that year.
The unemployment rate may:
A. understate the effect of a recession on employment because some leave the labor force. B. overstate the effect of a recession on employment because some leave the labor force. C. understate the effect of a recession on employment because many enter the labor force. D. overstate the effect of a recession on employment because many enter the labor force.