The opportunity cost of an activity includes the value of:
A. the chosen activity minus the value of the next-best alternative.
B. all of the alternatives that must be forgone.
C. the least-best alternative that must be foregone.
D. the next-best alternative that must be foregone.
Answer: D
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The value of the marginal product of labor equals the marginal product of labor times the:
A. price of output. B. real wage. C. nominal wage. D. quantity of labor.
An increase in ________ increases potential GDP and ________ aggregate supply
A) the money price of oil; decreases B) the money wage rate; decreases C) the money wage rate; increases D) technology; decreases E) technology; increases
Which of the following statements is correct for the price elasticity of demand along a linear, downward-sloping demand curve?
A) The price elasticity of demand is constant because the slope is constant. B) At low prices, demand is elastic but at high prices demand is inelastic. C) At high prices, demand is elastic but at low prices demand is inelastic. D) The price elasticity of demand is not defined for a linear demand curve because the slope is constant. E) None of the above answers is correct.
The federal funds rate is stated as:
A. a real interest rate. B. a rate that is automatically indexed to inflation. C. a nominal interest rate. D. the current rate less the expected rate of inflation.