If potential output equals $8 billion and actual output equals $10 billion, then this economy's output gap should be expressed as:
A. 20 percent.
B. 25 percent.
C. ?25 percent.
D. $2 billion.
Answer: B
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A good is most likely to be inefficiently priced if
a. some of the resources used in its production are scarce. b. the good is private property. c. some of the resources used in its production are free. d. a corporation produces the good.
Which of the following is not correct?
a. Many measures of inequality are based on income, which may not reflect a person's standard of living. b. Because many of the poorest families receive in-kind transfers, more families have lower standards of living when compared to poverty rates based on income. c. Because people can borrow and save to smooth out life cycle changes in income, equality measures based only on income may not reflect a person's standard of living. d. A person's standard of living depends more on her permanent income than her transitory income, so inequality measures based on current income may be misleading.
Economic efficiency would be primarily discussed with respect to which of the fundamental questions about a competitive market economy?
A. How will the goods and services be produced? B. What goods and services will be produced? C. Who will get the goods and services? D. How will the system promote progress?
Any firm's total revenue equals
A. P/q. B. MR/q. C. MR × q. D. P × q.