One reason stagflation is difficult to recover from is because:
A. less output requires less inputs to be hired.
B. prices tend to adjust more quickly downward than upward.
C. wages are sticky downward.
D. input prices increase with output prices.
Answer: C
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Nash equilibria are stable because
A) they involve dominant strategies. B) they involve constant-sum games. C) they occur in noncooperative games. D) once the strategies are chosen, no players have an incentive to negotiate jointly to change them. E) once the strategies are chosen, no player has an incentive to deviate unilaterally from them.
The water-diamond paradox discussed in the text implies that
a. water, unlike diamonds, is not subject to the law of diminishing marginal utility b. the less abundant a good, the lower is its marginal utility although its total utility may still be relatively high c. the more abundant a good, the lower is its marginal utility although its total utility may still be relatively high d. people would trade water for diamonds, a useful for a useless good e. the price of water is higher than the price of diamonds
Which of the following statements is false?
A) An increase in wage rates causes producers to move up along the SRAS curve. B) An increase in the price level causes producers to move up along the SRAS curve. C) The short-run aggregate supply (SRAS) curve is upward sloping. D) The long-run aggregate supply (LRAS) curve is vertical.
Mark's Baseballs produces baseballs. Mark's Baseballs has total fixed costs of $500. Mark's average variable cost is $20, and his average total cost is $25. Mark is currently producing:
A. 5 baseballs. B. 25 baseballs. C. 100 baseballs. D. a number of baseballs that cannot be determined from the information provided.