The structural deficit is
A. The deficit that would exist if the economy were at full employment.
B. Equivalent to the GDP gap.
C. Computed on the basis of the current value of automatic stabilizers.
D. Determined by the president of the United States.
Answer: A
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Full-employment output is also called
A) potential output. B) national output. C) natural output. D) target output.
John can make pizza at a lower opportunity cost than Allen, but Allen can make more pizzas per day than John. Therefore,
A) John has an absolute advantage in pizza. B) Allen cannot benefit from trade with John. C) John has a comparative advantage in pizza. D) John cannot benefit from trade with Allen. E) Allen has a comparative advantage in pizza.
If a monopolist's price is $50 per unit and its marginal cost is $25, then
A) to maximize profit the firm should continue to produce the output it is producing. B) to maximize profit the firm should decrease output. C) to maximize profit the firm should increase output. D) Not enough information is given to say what the firm should do to maximize profit.
Total consumer surplus is measured by the total area under the market demand curve and below the equilibrium price
a. True b. False Indicate whether the statement is true or false