Category: Economics

A shortage exists when
quantity demanded = quantity supplied.
quantity demanded < quantity supplied. quantity demanded > quantity supplied.
quantity demanded ≤ quantity supplied.

➤ How do I decide the optimal sample length for a time-series model?
Start by defining your research question and the economic horizon you want to capture. Run stationarity and break tests, compare information criteria, and use rolling-window or cross-validation to check stability. Prefer more data when relationships are stable; prefer shorter, recent spans if evidence shows parameter drift or changing measurement protocols.

➤ Why does breakeven mean total profit equals zero?
Breakeven means total profit equals zero because total revenue exactly matches total cost. When TR = TC a firm earns a normal return but no economic profit. This condition shows that all explicit and implicit costs are covered, unlike positive profit where TR exceeds TC and the firm earns extra economic rent.

In the long run classical model output is determined by ____.
A. factors of production only
B. production function only
C. factors of production and production function
D. none of the above

➤ When should you use real GDP instead of nominal GDP?
Use real GDP when you want to compare economic output across years while removing inflation effects. Real GDP fixes prices at a base year to measure volume change. This gives a clearer view of growth in production or productivity, especially for time-series comparisons.

What was the result of the Populist Party’s attempts at thepresidency?
They ended up in the White House.
Nothing.
Their platform was absorbed into the other two political parties.
None of the above

➤ When is public ownership or strict regulation justified to correct oligopoly failure?
Public ownership or tight regulation is justified when natural monopoly conditions or essential services make effective competition impractical. In those cases, government provision or regulated pricing can approximate marginal-cost outcomes while covering costs through subsidies. Use these tools selectively and monitor efficiency to avoid reduced incentives and fiscal burdens.

Question 6 (1 point)
If taxes were to decrease for a producer, ceteris paribus,
a supply would increase
b supply would decrease
c quantity supplied would increased
d quantity supplied would decrease