In the long run, current output will:
A. be above potential output.
B. only equal potential output if unemployment is zero.
C. equal potential output.
D. be less than potential output.
Answer: C
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Marginal propensity to consume is the percentage of your extra disposable income that you decide to ______.
a. use to buy goods and services b. save in an interest bearing account c. invest in shares of stock d. allocate to food and other necessities
Firms 1 and 2 compete in a Cournot duopoly. If firm 2 adopts a strategy that raises firm 1's marginal cost:
A. firm 2 will lose market share. B. firm 1 will reduce its output. C. firm 2 will enjoy lower profits. D. None of the statements is correct.
The opportunity cost of studying for an economics test is
A. The money you spent on tuition for the class. B. Negative because it may improve your grade. C. The activity that is the best alternative use of your time. D. Zero because you knew when you registered for the class that studying would be required.
A barter arrangement simply means
A) the government has paid for the goods. B) a promise to pay in the future. C) that gold must be offered from one party. D) a direct exchange of goods without the use of money.