The owner of a perfectly competitive firm is currently earning an economic profit of zero. This owner
A) should shut down since profits of zero are not good.
B) should raise the price of the product to increase profits.
C) is covering all of his fixed costs.
D) will continue producing in the short-run but will shut down in the long run if profits do not increase.
C
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The economy pictured in the figure below has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; B B. recessionary; C C. recessionary; A D. expansionary; A
In the years after 1998, the most severe recession occurred during
A) 1998. B) 2000-2001. C) 2008-2009. D) 1999-2001. E) 2005.
Jack was unemployed two weeks ago but just started a new job. As a result of this increase in the number of employed workers, which of the following occurred?
A) The labor force participation rate increased. B) The unemployment rate decreased. C) The unemployment rate increased. D) The labor force participation rate decreased.
Explain why a riskier asset offers a higher expected return.
What will be an ideal response?