Companies that operate in markets that have free entry and exit
A. can earn negative economic profits, but in the long run, firms have zero economic profits.
B. can earn positive or negative economic profits, but in the long run, firms have negative economic profits.
C. can earn positive economic profits, but in the long run, firms have zero economic profits.
D. can earn positive or negative economic profits, but in the long run, firms have zero economic profits.
Ans: D. can earn positive or negative economic profits, but in the long run, firms have zero economic profits.
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The economy pictured in the figure has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; A B. recessionary; C C. recessionary; B D. expansionary; A
Refer to the above figure. Which panel is consistent with the Laffer curve?
A) Panel A B) Panel B C) Panel C D) Panel D
When marginal product is rising, marginal costs will: a. rising
b. remaining unchanged. c. falling. d. rising by an equal amount.
If the PPF for two goods is a downward-sloping straight line, the resources used to produce those goods are equally well suited to the production of both goods
Indicate whether the statement is true or false