What is productive efficiency?
A) a situation in which firms produce as much as possible
B) a situation in which resources are allocated such the last unit of output produced provides a marginal benefit to consumers equal to the marginal cost of producing it
C) a situation in which resources are allocated such that goods can be produced at their lowest possible average cost
D) a situation in which resources are allocated to their highest profit use
C
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The big-push theory argues that coordination failures may arise because of
a. pecuniary externalities. b. technological externalities. c. lack of human capital. d. all of the above.
Persistence is
A) the tendency for declines in economic activity to be followed by further declines, and for growth in economic activity to be followed by more growth. B) the idea that the standard pattern of contraction—trough—expansion—peak occurs again and again in industrial economies. C) the tendency of many economic variables to move together in a predictable way over the business cycle. D) the idea that peaks and troughs of the business cycle occur at regular intervals.
If the government intervenes in a labor dispute and requires settlement through binding arbitration, what takes place?
a. A neutral third party makes a decision that both parties must accept. b. A neutral third party makes a decision that both parties may reject. c. One party sues the other in court. d. The two parties negotiate an agreement without assistance and both must accept it. e. The two parties negotiate an agreement with assistance from their attorneys and both must accept it.
If the multiplier is 4, equilibrium real GDP is $600 billion, and investment is $25 billion, what will happen if investment increases to $30 billion? Real GDP will:
a. increase to $605 billion b. decrease to $595 billion c. increase to $620 billion d. increase to $624 billion e. decrease to $580 billion