One of the basic facts of life is that people must make choices as they try to attain their goals. This unavoidable fact comes from a reality an economist calls
A. economics.
B. the market.
C. scarcity.
D. rationality.
Ans: C. scarcity
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Producer surplus for the whole market can be thought of as
A) total profit. B) variable operating profit plus factor rents. C) total profit minus factor rents earned by lower cost firms. D) total profit plus factor rents earned by lower cost firms.
Using the income approach, an estimate of the value of capital worn out producing GDP is:
a. indirect business taxes. b. capital consumption allowance or depreciation. c. gross private domestic investment. d. capital erosion estimate.
The period during which real output falls during a business cycle is called:
a. peak. b. recession. c. recovery. d. trough.
The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output. B. government policy. C. decreasing inflation only. D. increasing or decreasing inflation.