Exhibit 6-2 Refer to Exhibit 6-2. How many persons are not participating in the labor force in year 2?
a. 200 million
b. 50 million
c. 75 million
d. 175 million
e. 100 million
Answer: e. 100 million
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What caused a major economic shock in August 2007?
A) U.S. mortgage market B) war in Iraq C) U.S. bond market D) technology stocks E) misreporting from Asian markets
If a perfectly competitive firm is producing 2,000 units and, at the 2,000th unit, the difference between marginal revenue and marginal cost (MR - MC) is zero, which of the following is true?
A) The firm is maximizing profit. B) The firm should decrease production to maximize profit. C) The firm should increase production to maximize profit. D) The firm should exactly double production to maximize profit.
Refer to the accompanying figure. At quantities less than 50 doughnuts per day:
A. average cost is declining because marginal cost is increasing. B. average cost is declining because marginal cost is less than average cost. C. marginal cost is declining. D. the return to the firm's variable factors of production must be increasing.
When the unemployment rate is below the natural rate,
a) wages and prices will begin to rise and employment will fall b) real wages will fall and employment will increase c) prices will fall, and unemployment will rise d) the natural rate will increase to restore equilibrium e) the unemployment rate will rise, but neither prices not wages will change