Normal profit
A. Is the accounting profit earned when economic profits are greater than zero.
B. Covers the full opportunity cost of the resources used by the firm.
C. Is an above-average rate of return.
D. Is sufficient to induce entry into the industry.
Answer: B
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Oligopolists often sacrifice economies of scale as they expand product variety
a. True b. False
Under laissez faire, the force that drives the economy toward an efficient outcome is
a. central planning. b. majority voting. c. the pursuit of self-interest. d. altruism.
If workers and firms raise their inflation expectations,
A) unemployment will fall. B) the short-run Phillips curve will be vertical. C) the short-run Phillips curve will shift upward. D) actual inflation will fall to match expected inflation.
A trade surplus could be balanced by all of the following except
a. borrowing from domestic citizens. b. selling domestic assets to foreigners. c. borrowing from foreigners. d. selling foreign assets already owned by U.S. citizens to foreigners.