In the short run, a monopolist's economic profits:
A. are always positive because the monopolist is a price-maker.
B. are usually negative because of government price regulation.
C. are always zero because consumers prefer to buy from competitive sellers.
D. may be positive or negative depending on market demand and cost conditions.
Answer: D
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Are markets always in equilibrium?
A. Yes, they are always at the equilibrium point, or very close to it. B. Yes, because few things tend to alter supply and demand. C. No, but if there is no interference, they tend to move toward equilibrium. D. No, they never “settle down” into a stable price and quantity. E. Uncertain, economic theory has no answer to this question.
Corrected for inflation, the real GDP was only about _____ times greater in 2014 than in 1959.
A. 3.1 B. 5.3 C. 6.7 D. 11.2
Which of the following occurs when the spending on final goods and services exceeds full-employment GDP?
A. Unemployment. B. Recessionary gap. C. Inflationary gap. D. Inventory accumulation.
When actual output equals potential output there is ________ output gap and the rate of inflation will tend to ________.
A. an expansionary; increase B. no; remain the same C. an expansionary; decrease D. a recessionary; increase