The process of taking advantage of market inefficiencies to earn profits is called:
A. arbitrage.
B. technical analysis.
C. a random walk.
D. futures contracting.
A. arbitrage.
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In both Gamma and Delta average labor productivity is $20,000 per worker per year. The population of Gamma is 200,000 and the population of Delta is 400,000. Sixty percent of the population in each country is employed. Total output in Gamma is ________ and total output in Delta is ________.
A. $8 billion; $4 billion B. $2.4 billion; $4.8 billion C. $120,000; $800,000 D. $4 billion; $8 billion
If a firm’s average cost is declining, setting price equal to marginal cost will
A. maximize the firm’s profits. B. minimize the firm’s losses. C. guarantee that the firm will lose money. D. help the firm earn the opportunity costs of its resources.
If Jen takes out a $2,000 loan for one year at 10 percent interest annually, the price she will pay for borrowing is:
A. $200. B. $2,000. C. $2,400. D. $2,200.
Long-run economic profit does not exist for fixed factors like land because
A) bidding drives up the price of the factor until no economic profit exists. B) there is no market for such factors. C) these factors have L-shaped isoquants. D) these factors will earn economic profits.