In macroeconomic analysis, the representative consumer
A) denotes the consumer with the average amount of income.
B) plays the role of a stand-in for all consumers in the economy.
C) is the consumer who bargains with firms for all workers in the economy.
D) is always a misleading fiction.
B
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Refer to Figure 17-2. Suppose the economy is at point C in the figure above. If workers adjust their expectations of inflation, which of the following will be true?
A) Workers and firms expect inflation to be 1%. B) The short-run Phillips curve will shift to the right. C) The natural rate of unemployment is 6%. D) The economy will move from C to A. E) The short-run Phillips curve will shift to the left.
Jon runs a bar in New York City. A city law prevents smoking in New York bars, but Jon is able to convince a friend in city hall to grant his bar a smoking permit by exploiting some fancy loopholes in the law
While smoking enables Jon to charge a premium to the customers (higher drink prices), his workers are subject to second-hand smoke. Therefore Jon has to pay his workers a wage higher than he otherwise would. Assuming Jon's production function is f(L,K) = L?K1-?, where L is the quantity of workers and K is the quantity of capital, how does Jon's optimal capital-to-labor ratio compare to similar bars without smoking?
If consumption spending is greater than national income,
a. saving is positive b. dissaving occurs c. saving is exactly zero d. a depression results e. investment is greater than saving
Which of the following is most likely to be a fixed cost?
A. Shipping charges B. Wages for unskilled labor C. Property insurance premiums D. Expenditures for raw materials