Stagflation refers to a situation in which the economy is experiencing:
A. high economic growth and high inflation.
B. low economic growth and high inflation.
C. high economic growth and low inflation.
D. low economic growth and low inflation.
Answer: B
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In the long run, if price is less than average cost
A) there is an incentive for firms to exit the market. B) there is no incentive for the number of firms in the market to change. C) there is profit incentive for firms to enter the market. D) the market must be in long-run equilibrium.
According to the Solow model, an increase in the capital—labor ratio will
A) always reduce steady-state consumption per worker. B) always increase steady-state consumption per worker. C) reduce steady-state consumption per worker if the capital—labor ratio is below the Golden rule capital stock. D) increase steady-state consumption per worker if the capital—labor ratio is below the Golden rule capital stock.
Keith just got an iPhone 5 for his birthday, and he quickly switches his data over and throws his iPhone 4 in a drawer and forgets about it. Economists would say this behavior is ___________ and would use the concept of ________________ to explain this choice.
A. rational; the implicit cost of ownership B. irrational; the implicit cost of ownership C. irrational; ignoring sunk costs D. rational; considering sunk costs
Demand for products such as insulin, cancer drugs, and tobacco is usually inelastic.
a. true b. false