A theoretical restriction on the short-run cubic cost equation, TVC = aQ + bQ + cQ2, is
A. a > 0, b < 0, c < 0
B. a > 0, b > 0, c > 0
C. a > 0, b > 0, c < 0
D. a > 0, b < 0, c > 0
Answer: D
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By comparison to U.S. labor market policies, European labor market policies promote
A) greater unemployment and job security. B) slower real wage growth and greater income inequality. C) greater job opportunities for low-skill workers and greater bargaining power for workers. D) higher real minimum wages and slower real wage growth.
Which of the following statements is FALSE?
A) The official absolute poverty level in the United States is far above the average income of many countries in the world. B) In a relative sense, the problem of poverty will always exist. C) An equal distribution of income would eliminate relative poverty. D) An equal distribution of income would eliminate absolute poverty.
Public choice theory assumes that government makes optimal policies to respond to the shortcomings of private markets
a. True b. False
Why do economists prefer to compare Real GDP figures for various years instead of GDP figures?
A) Because when GDP in one year is higher than in another year, there is no way to tell why it is higher. Is it because output is higher, prices are higher, etc.? This is not the case with Real GDP. If Real GDP is higher in one year than in another year, it is because output is higher. B) Because when GDP in one year is higher than in another year, there is no way of knowing if the quality of goods produced is higher in one year than the other. This is not the case with Real GDP. If Real GDP is higher in one year than in another year, it is because the quality of the goods produced is higher. C) Actually the question is incorrect. Economists prefer to compare GDP figures instead of Real GDP figures. D) Because Real GDP is easier to compute than GDP. E) Because when GDP in one year is higher than in another year, there is no way to tell if the quality of life is higher in one year than the other. This is not the case with Real GDP. If Real GDP is higher in one year than in another year, it is because the quality of life is higher.