Which of the following statements about unanticipated inflation is true?
a. It reduces average purchasing power in the economy.
b. It reduces total purchasing power in the economy.
c. It redistributes purchasing power in the economy.
d. It reduces nominal wages.
e. Its effects are spread evenly throughout the economy so that no one gains or loses from inflation.
C
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Fill in the blank: a combination of two goods that lies beyond the production possibilities frontier ________
A) can be produced with the current set of resources B) cannot be produced with the current set of resources C) can never be produced with any set of resources D) can be produced but only if the producer becomes more greedy
Suppose you are the owner of a softball team and you are hiring laborers (players). Suppose also that not all players are equally talented, but that union rules require that they all receive the same salary. If you measure output by the number of runs scored in a season, your total variable cost curve will take what shape, and why?
a. U-shaped because softball teams like this one are no different from other businesses b. U-shaped because even though salaries are identical, some players are better and will score more runs c. increasing but at different rates because there are only so many times players can come to bat d. increasing but at different rates because even though salaries are identical, some players are better and will score more runs e. increasing at a constant rate because union rules require uniform salaries for players
Once the expenditure schedule has been adjusted for tax levels, the determination of equilibrium GDP
a. is no longer possible. b. becomes much more difficult. c. proceeds exactly as before. d. requires a higher multiplier value.
Three individuals have $1000 and identical preferences for gum, g, and cigarettes, s, as measured by the utility function U(g,s) = 10g0.9s0.1. The price of gum is $9 and the price of cigarettes is $12. What is the market surplus/shortage at a price of $12 when the supply of cigarettes is 5?
A) There will be a shortage of 3 cigarettes. B) There will be a surplus of 3 cigarettes. C) There will be a shortage of 2/3 cigarettes. D) There will be a surplus of 2/3 cigarettes.