Big Bear Enterprises, which competes in a perfectly competitive market, is producing so that the point chosen along the production possibility frontier is socially preferred. Big Bear Enterprises has achieved which of the following?
a. Allocative efficiency
b. Productive efficiency
c. Economies of scale
d. Long-run equilibrium
a. Allocative efficiency
Big Bear Enterprises has achieved allocative efficiency.
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If real disposable income is $300 billion and real consumer expenditures are $250 billion, it can be assumed that
a. the government is spending the difference. b. the difference is being invested. c. households are saving the difference. d. transfer payments make up the difference.
The rental price of capital is the price a person pays to own the capital indefinitely
a. True b. False Indicate whether the statement is true or false
Which of the following is a characteristic of economic rent?
A. It can never be negative. B. It equals economic profit minus accounting profit. C. It is driven towards zero by free entry. D. It can be positive, zero, or negative.
The population of a small town is 5,000. There are 4,000 people in the labor force, and 3,500 people are employed. The unemployment rate equals
A. 5 percent. B. 10 percent. C. 12.5 percent. D. 35 percent