Wendy claims that the right mix of hamburgers and other goods is being produced, but that they are not being produced in the least costly way. How would an economist assess Wendy's claim?
A. Wendy is asserting that productive efficiency is realized in hamburger production, but not allocative efficiency. Wendy's assertion cannot be correct.
B. Wendy is asserting that allocative efficiency is realized in hamburger production, but not productive efficiency. Wendy's assertion may be correct.
C. Wendy is asserting that productive efficiency is realized in hamburger production, but not allocative efficiency. Wendy's assertion may be correct.
D. Wendy is asserting that allocative efficiency is realized in hamburger production, but not productive efficiency. Wendy's assertion cannot be correct.
Answer: D
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The figure above shows the market for fast food restaurant employees in a college town in a small nation to the East. The local Taco Bell pays its workers $12 an hour. This wage rate is
A) designed reduce the unemployment rate. B) an effort to increase the demand for labor. C) illegal because the equilibrium wage rate is $6 an hour. D) an efficiency wage aimed at reducing employee turnover. E) the actual equilibrium wage rate.
If a corporate bond with a face value of $5,000 pays yearly coupon payments of $100, what is the coupon rate?
A) 2% B) 5% C) 10% D) 20%
Which of the following does not hinder economic development?
a. low birth rates b. low saving c. lack of infrastructure d. low levels of technology e. the importance of tradition
When the central bank pursues contractionary monetary policy, we that this policy will result in an increase in the interest rate, a reduction in investment, a reduction in demand, and a lower level of equilibrium output. Explain what happens to the position of the IS curve as the central bank pursues contractionary monetary policy
What will be an ideal response?