When people believe that an economic fluctuation is both permanent and caused by supply-side events, the result is ______.
a. a positive relationship between the unemployment and inflation rates
b. a negative relationship between the unemployment and inflation rates
c. high unemployment rates and low inflation rates
d. low unemployment rates and high inflation rates
a. a positive relationship between the unemployment and inflation rates
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If production of an item results in negative external costs, then
A) the market price is below the socially preferred price that reflects the external costs. B) the market price is above the socially preferred price that reflects the external costs. C) market forces will always correct the problem. D) the market quantity is too low from society's point of view.
The marginal factor cost facing each employer in a competitive labor market is greater than the market wage rate.
Answer the following statement true (T) or false (F)
The following is a total-product schedule for a resource. Assume that the quantities of other resources the firm employs remain constant.Units of ResourceTotal Product124242354464572If the firm's product sells for a constant $2 and the price of the resource is a constant $16, the firm will employ how many units of the resource?
A. 5 B. 4 C. 3 D. 2
A firm finds that at its MR = MC output, its TC = $1,000, TVC = $800, TFC = $200, and total revenue is $900. This firm should:
A. shut down in the short run. B. produce because the resulting loss is less than its TFC. C. produce because it will realize an economic profit. D. liquidate its assets and go out of business.