When price and marginal cost are equal for a perfectly competitive firm, the firm is
A) minimizing average total cost.
B) maximizing total revenue.
C) maximizing economic profit.
D) earning negative economic profit.
Answer: C
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Which of the following is the best example of money used as a medium of exchange?
A. Prices of products in a store in Mexico are marked in terms of U.S. dollars. B. A farmer stores $100 dollar bills in a strong box under the floor in a barn. C. A plumber unclogs a drain for a carpenter, who repairs broken steps for the plumber. D. In a prisoner of war camp cigarettes are traded for socks, candy and/or food, even by nonsmokers.
Using the data in the table above, the growth rate of real GDP has
A) increased from year to year. B) increased more rapidly from year to year. C) remained constant from year to year. D) slowed from year to year. E) probably changed, but more information is needed about the price level to determine by how much it has changed.
The "nominal" interest rate is the
A) rate actually quoted in financial markets. B) rate actually quoted in financial markets minus the expected inflation rate. C) rate actually quoted in financial markets plus the expected inflation rate. D) rate actually quoted in financial markets divided by the expected inflation rate.
Unemployment in the post-World War II era (1945–50)
(a) was reduced only because of the post-war decline in the size of the civilian labor force. (b) rose above wartime levels, but remained far below the levels of the 1930s. (c) rose in response to the decline in civilian consumption levels. (d) remained at the low levels achieved in World War II (1941–45).