Potential growth measures:
a) The growth of the fastest economy in the world
b) The fastest growth an economy has ever achieved
c) The present rate of growth of an economy
d) The rate of growth that could be achieved if resources were fully employed
Answer: d) The rate of growth that could be achieved if resources were fully employe
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What is the profit maximizing rule for firms? (i.e. how do they decide what output to produce?) b. Explain why this approach will maximize profits for a firm.
Refer to Figure 17-4. Which of the following is true if the wage rate increases from W1 to W2?
A) The substitution effect becomes larger than the income effect. B) The income effect becomes larger than the substitution effect. C) The supply curve is unit elastic. D) The income effect and the substitution effect are equal.
An inflation-induced increase in the effective tax rate on interest income and capital gains results in
a. a leftward shift of the saving schedule. b. a rightward shift of the saving schedule. c. no shift of the saving schedule. d. a rightward shift of the investment schedule.
If the monopolist facing the demand curve P = 10 - Q is a perfectly discriminating monopolist and marginal cost is constant at $4, how much will the firm sell if it profit maximizes? 
A. 6 B. 4 C. 5 D. 10