If an economy produces 3 million oranges that sell for $0.25 each and 100,000 cars that sell for $25,000 each, then when the market value of total output is calculated:
A. oranges receive the same weight as cars.
B. the market value of oranges is excluded.
C. oranges receive a greater weight than cars.
D. oranges receive a smaller weight than cars.
Answer: D
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Comment on the following statement: "If a firm shuts down in the short run, it will earn zero economic profit."
What will be an ideal response?
Single-owner proprietorships often unintentionally exaggerate their profits because they
A) forget their explicit losses. B) look at after-tax instead of pre-tax costs. C) pay their bills late and therefore incur large interest charges. D) neglect to consider the opportunity cost of the owner's labor.
In the short run, we assume that the number of firms in a perfectly competitive market:
A. varies if perfect information is present. B. is fixed. C. is equal to the number of firms in the long-run. D. varies more than the long-run equilibrium.
Data on the unemployment rate in the U.S. since 1960 show that the unemployment rate is
a. always zero. b. sometimes zero. c. rarely zero. d. never zero.