A Chinese restaurant buys 10 cups of rice for $1; soy, fish and oyster sauces for $1 each; and assorted vegetables for $20. They create 10 meals with these ingredients and sell each one for $5. How much does this process contribute to GDP?
A. $23
B. $50
C. $73
D. $27
B. $50
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The reason economists consider monopoly to be socially undesirable is that monopolists:
A. can charge any price they want. B. produce less than the socially optimal level of output. C. earn too much economic profit. D. exploit the inelastic nature of demand.
Over the business cycle, real GDP fluctuates around
A) the business cycle trough. B) the business cycle peak. C) nominal GDP. D) potential GDP. E) the Lucas Wedge.
When there is an excess of expected net income over the cost of capital
A) abnormal net income is positive. B) accounting profits are negative. C) abnormal net income is negative. D) economic profits minus abnormal net income is negative.
For the six years following the passage of the North American Free Trade Agreement (NAFTA),
a. the U.S. economy had some of the slowest job growth and highest unemployment in its history. b. the U.S. economy had some of the most rapid job growth and low unemployment in its history. c. the U.S. economy had some of the most rapid job growth and modest unemployment in its history. d. the U.S. economy had some of the slowest job growth and modest unemployment in its history.