Many economists believe that the rise in European unemployment from 1960 to 2011 was caused by:
A. generous unemployment benefits.
B. the decreased influence of union insiders.
C. an increase in the number of younger workers, who have higher rates of unemployment.
D. economic inequality.
Ans: A. generous unemployment benefits.
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A firm sells a product in a perfectly competitive market. The marginal cost of the product at the current output level of 500 units is $1.50. The minimum possible average variable cost is $1. The market price of the product is $1.25. To maximize profits, the firm should
A. decrease production to less than 500 units. B. increase production to more than 500 units. C. continue producing 500 units. D. shut down.
The study of economics
A) focuses mainly on individual consumers. B) arises from the fact that our wants exceed available resources. C) recognizes that scarcity does not affect rich nations. D) deals mainly with microeconomics.
A high current rate of inflation ________ those who have saved and ________ those who have borrowed
A) harms, helps B) harms, has no effect on C) helps, helps D) helps, has no effect on E) helps, harms
In the view of the classical school, unemployment:
a. is a permanent condition. b. disappears when everyone who is willing to work at the equilibrium wage finds employment. c. exists because people do not interfere with the competitive process. d. is only temporary because all wages and prices are rigid. e. is necessary and good for the economy.