The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output.
B. government policy.
C. decreasing inflation only.
D. increasing or decreasing inflation.
Answer: D
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The return that an entrepreneur can expect to earn, on average, is called
A) profit. B) normal profit. C) economic profit. D) accounting profit.
Which of the following is not consistent with perfect competition?
a. all firms face the same costs. b. firms cannot determine the price of the goods they sell. c. the marginal product of labor is diminishing. d. firms negotiate the same wages for different workers.
Which of the following describes the relationship among market price (P), average revenue (AR), and marginal revenue (MR) for a firm in monopolistic competition
a. P = AR = MR b. P > AR = MR c. P = AR > MR d. P > AR > MR e. P = AR < MR
The system we use to measure the value of an economy is called:
A. national income accounting. B. national economic valuation. C. macroeconomic summation. D. national expenditure accounting.