Which of the following is NOT considered a determinant of income differences?
A) productivity
B) age
C) discrimination
D) equity or fairness
D
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According to Gordon, a major problem with Keynes' "rigid nominal wage" theory of the business cycle is
A) a horizontal LM curve. B) it is not a market clearing theory. C) falling real wages are not countercyclical with business activity or Y. D) None of the above.
Joe and Rita each have some milk and cookies (Milk on the horizontal axis). Joe's MRS of cookies for milk is 2. Rita's MRS of cookies for milk is 4. Which of the following statements is TRUE?
A) No gains from trade are possible. B) Both Rita and Joe can be made better off if Rita gives Joe some cookies in exchange for milk. C) Rita and Joe are on the contract curve. D) Both Rita and Joe can be made better off if Joe gives Rita some cookies in exchange for milk.
In a free market economy, current consumption, saving and investment decisions
a. are controlled largely by the government. b. shape the future course of the national economy. c. are necessarily controlled by big businesses. d. require protection from foreign forces if individuals desire wealth accumulation.
Which of the following assumptions is TRUE about monopolistic competition?
A. Firms will not advertise. B. The firm's products are differentiated. C. There are few producers of the product. D. It is difficult for firms to enter this industry.