The owners of a firm are earning economic profit if
a. return on their capital is lower than the opportunity cost of employing that capital in their industry.
b. their total revenues exceed the monetary payments to labor and other resources in the long run after all plant size adjustments are made.
c. price exceeds average variable costs at the shutdown point.
d. they are earning a return on their capital that is higher than what can generally be earned in other markets.
D
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In the short-run, real GDP can be greater than or less than potential GDP because in the short run the
A) money wage rate is fixed. B) quantity of capital is fixed. C) full-employment level of employment is fixed. D) price level is fixed.
How has the composition of trade flows changed from the early twentieth century to today? Compared to the past, is anything about trade today new?
What will be an ideal response?
A consumer purchases a book by driving across town to a bookstore, standing in line for five minutes to pay the cashier, and then pays $5
The same book is purchased by another consumer who spends 2 minutes placing the order over the internet for $10. The book necessarily cost the first consumer less. Indicate whether the statement is true or false
Assume that when $100 of new reserves enter the banking system, the money supply ultimately increases by $625 . Assume also that no banks hold excess reserves and that the entire money supply consists of bank deposits. If, at a point in time, reserves for all banks amount to $500, then at that same point in time, loans for all banks amount to $2,625
a. True b. False Indicate whether the statement is true or false