Demand for one item goes down when the price of another item goes up. These items must be
A. substitutes.
B. inferior goods.
C. normal goods.
D. complements.
Answer: D
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According to new growth theory, technological change is driven by
A) random chance. B) government policies. C) foreign firms' attempts to increase their sales in the domestic market. D) firms' attempts to increase their profit.
When real GDP exceeds potential GDP, then the economy has
A) an inflationary gap. B) a below-full-employment equilibrium. C) a recessionary gap. D) None of the above answers are correct.
In year 2000 dollars, per pupil expenditures on education in the United States in 1940 was around _____
a. $500 b. $1000 c. $2000 d. $4000
Profits are maximized when
A) price equals marginal revenue. B) marginal revenue equals average total costs. C) marginal revenue equals marginal cost. D) when price equals average total costs.