The process in which new technologies replace old ones, new businesses replace existing businesses, and new skills make old ones irrelevant is referred to as:
A) business development. B) creative destruction.
C) globalization. D) liberalization.
B
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Which of the following best applies to the distinction between the "long run" and the "short run"?
A) The short run is a period of approximately 1-6 months while the long run is any time frame which is longer. B) In the short run, only new firms may enter, while in the long-run firms may either enter or exit the market. C) The rationing function of price is a short-run phenomenon whereas the guiding function is a long-run phenomenon. D) All of the above statements are correct.
The principal-agent problem in corporations exists because the managers of a firm
A) may pursue their own goals even when the result is lower profit for owners. B) may know how to operate the business better than absentee owners do, and yet not be allowed to. C) are generally unable to do the monitoring that would result in the firm's avoiding moral hazard problems. D) are generally unable to do the monitoring that would result in the firm's avoiding adverse selection. E) are generally unable to monitor workers, who do not care about the profits due the managers.
When the unemployment rate ________ the natural unemployment rate, real GDP ________ potential GDP.
A) is greater than; is less than B) equals; is greater than C) is less than; is less than D) equal; is less than E) is greater than; equals
One main point of Frederic Bastiat's satire is that:
A. Employment and jobs is the single most important measure of the standard of living B. We should not try to produce what we can get from others at a lower cost C. Some industries may reasonably require protection in order to grow D. Exporting is always a worthwhile activity to be supported and enhanced