If economic profit is zero, a firm
A. earns a negative rate of return.
B. earns a positive but below normal rate of return.
C. will leave the industry.
D. earns exactly a normal rate of return.
Answer: D
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As a result of establishing a legal minimum wage above the market clearing wage
A) there will be a shortage of workers. B) firms will hire fewer workers. C) firms will hire more workers. D) fewer workers will want to work.
In Figure 2.1, Box 2 would be labeled 
A. P* for equilibrium price. B. P for price. C. D for demand. D. S for supply.
The lowest level of unemployment compatible with price stability
A. Is estimated at between 0 and 2 percent unemployment. B. Is referred to as full employment. C. Allows for some cyclical unemployment. D. Is equal to the natural rate of unemployment plus the inflation rate.
Suppose a person has a discount rate of zero. This implies she
A) places no value on the future. B) places no value on the present. C) values the present and the future equally. D) would not lend money at any positive interest rate.