Refer to the information provided in Figure 26.1 below to answer the question(s) that follow.
Figure 26.1Refer to Figure 26.1. At $1,500 billion, this economy
A. is above its production capacity.
B. reaches its capacity.
C. is producing below its capacity.
D. Any of the above can be correct.
Answer: B
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Recently economists have added what factor as a major explanation of economic growth?
A) the growth rate of labor B) the growth rate in labor and capital productivity C) technology D) the growth rate of capital
From a standpoint of resource allocation, a surplus of corn implies
a. the price of corn is too low and should be increased b. consumers would prefer some of the resources used to produce corn be used to produce something else. c. the market for agricultural products is failing. d. the quantity demanded of corn exceeds the quantity supplied. e. government should purchase the surplus to protect the farmers.
Assume the tennis ball industry, a perfectly competitive industry, is in long-run equilibrium with a market price of $5. If the demand for tennis balls increases and the industry experiences decreasing returns to scale, long-run equilibrium will be reestablished at a price
A. greater than $5. B. equal to $5. C. less than $5. D. either greater than or less than $5, depending on the number of firms that enter the industry.
Suppose a major computer virus struck the nation's computers and all hard drives were erased. What would happen in the labor market?
a. The real wage would increase and so would employment. b. The real wage would not change, but employment would decrease. c. The real wage would increase and employment would decrease. d. The real wage would decrease and so would employment. e. The real wage would decrease and employment would increase.