Economic profit might result from:
A. easy entry into industries.
B. dynamic change and uncertainty.
C. X-inefficiency.
D. a decline in entrepreneurship.
Answer: B
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Average productivity will fall as long as
A) marginal productivity is falling. B) it exceeds marginal productivity. C) it is less than marginal productivity. D) the number of workers is increasing.
Which of the following is an example of a normative economic statement?
a. The inflation rate in the United States decreased 4 percent because the price of energy fell. b. The economy grew at an annual rate of 5 percent during the first quarter of this year. c. If two automobile companies merge, the price of automobiles will rise. d. An increase in international trade benefits some workers but hurts others. e. The minimum wage should be increased so that low-income workers can afford to keep up with the cost of living.
A regional trade agreement involves:
a. Most, if not all, the nations in the world. b. several nations, usually trading partners, with a common agenda or geographically linked. c. nations that agree to trade only with nations in their region. d. a region of the world with not only trade issues but also political cohesiveness.
Fiscal policy is most effective when capital is not mobile and the country has fixed exchange rates.
Answer the following statement true (T) or false (F)