Stick Storage manufactures and sells computer flash drives. Last year it sold 2 million flash drives at a price of $10 each. For last year, the firm's
a. accounting profit was $20 million.
b. economic profit was $20 million.
c. total revenue was $20 million.
d. explicit costs was $20 million.
c
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The combination of inefficiently high demand and dwindling quantity leads to what is called:
A. rival in consumption. B. the free rider problem. C. nonexcludable consumption. D. the tragedy of the commons.
Refer to the figure. Suppose that the economy is currently operating at the intersection of AS and AD 2 , and that the full-employment level of output is Y. Because of the ratchet effect:
A. it is impossible to enact fiscal policy that will both reduce output to Y and reduce demand-
pull inflation.
B. fiscal policy will need to be more contractionary to reduce output to Y than if no ratchet
effect occurred.
C. tax increases will be more effective at reducing demand-pull inflation than cuts in
government spending.
D. contractionary fiscal policy that shifts aggregate demand to AD 1 will cause real GDP to fall below its full-employment level.
Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output B. D; an expansionary C. B; recessionary D. D; a recessionary
Assume a candidate for president makes the argument that the United States should not trade with countries that have lower wages than we do because by doing so it will result in an export of American jobs abroad. Critically evaluate this claim
What will be an ideal response?