What is the national income identity for a closed economy?
What will be an ideal response?
Y = C + I + G
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In the table above, if the wage rate is $8.00 per hour, the profit-maximizing number of workers is
A) 1. B) 2. C) 4. D) 5.
In short-run equilibrium, a perfectly competitive firm
A. may earn a profit or a loss. B. always earns a profit. C. never earns a profit. D. earns a profit only if the firm has no fixed cost.
Mike wants to open his own repair shop, and is considering using his savings of $30,000 to get it started. He is currently earning 3 percent interest on his savings. His friend Bob calls him and asks to borrow $30,000 to start up a bagel shop; Bob offers to pay him 5 percent interest if he loans him the money. If Mike were to use the money to open his own repair shop, how can he accurately account for his costs?
A. Mike must consider the $900 in forgone interest on his savings as an implicit cost. B. Mike must consider the $1,500 in forgone interest from loaning the money to Bob as an implicit cost. C. Mike must consider the $900 in forgone interest on his savings as an explicit cost. D. Mike must consider the $1,500 in forgone interest from loaning the money to Bob as an explicit cost.
Long-run equilibrium will occur at the price level at which
A. the long-run aggregate demand and short-run aggregate supply curves intersect. B. the aggregate demand and long-run aggregate supply curves intersect. C. the aggregate demand and short-run aggregate supply curves intersect. D. the short-run aggregate supply and long-run aggregate supply curves intersect.