Using baseline budgeting,
A. an increase in spending is spending greater than that needed to provide an unchanged level of services.
B. an increase in spending is spending greater than last year's spending.
C. an increase in spending is spending greater than that needed to keep up with inflation.
D. all budgets revert to zero at the beginning of each fiscal year.
Answer: B
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If a country's real GDP grows at 10% per year, its real GDP will double about every
A) 5 years. B) 7 years. C) 10 years. D) 14 years.
Which of the following statements best describes the price, output, and profit conditions of monopolistic competition?
a. Price will equal marginal cost at the profit-maximizing level of output; profits will be positive in the long-run. b. Price will always equal average variable cost in the short run and either profits or losses may result in the long run. c. Marginal revenue will equal marginal cost at the short run, profit-maximizing level of output; in the long run, economic profit will be zero. d. Marginal revenue will equal average total cost in the short run; long-run economic profits will be zero.
Which of the following is a difference between a binding and a not binding price ceiling?
a. A binding price ceiling causes a shortage in the market, while a not binding price ceiling causes a surplus in the market. b. A binding price ceiling causes a surplus in the market, while a not binding price ceiling causes a shortage in the market. c. A binding price ceiling causes a shortage in the market, while a not binding price ceiling does not affect market behavior. d. A binding price ceiling causes a surplus in the market, while a not binding price ceiling does not affect market behavior.
If the absolute price elasticity of demand is 0.1, a 10 percent decrease in the price will cause
A. the quantity demanded to increase by 10 percent. B. the quantity demanded to increase by 100 percent. C. the quantity demanded to increase by 0.1 percent. D. the quantity demanded to increase by 1 percent.