One tenet of classical economics is that
A. the government should set a minimum wage slightly above the natural market equilibrium rate.
B. the government should intervene whenever necessary to avoid any unemployment.
C. the role of the government should be limited, since the market will always be self-correcting.
D. wages and prices are "sticky downward."
Answer: C
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a. are forms of resources that can be used in future production b. require a physical existence c. earn an economic rent d. yield profits for their owners e. require obtaining more education and job skills
If long-run costs are plotted on the vertical axis and quantity of output plotted on the horizontal axis, a positively sloped line implies _____
a. constant returns to scale b. economies of scale c. diseconomies of scale d. an increase in capital-labor ratio e. a decrease in cost-output ratio
Distinguish the terms price ceiling and price floor
An increase in investment demand would be a consequence of a fall in:
a. The costs of acquiring new technology b. Expected sales of new products c. The rate of technological innovation d. The expected rate of return on investment