If nominal wages are downwardly rigid, a countercyclical policy during a recession leads to ________
A) a fall in consumption B) an increase in tax rates
C) an increase in employment D) a fall in investment
C
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Along a linear downward-sloping demand curve, the price elasticity of demand will be
A. equal to zero across each price range. B. greater than one across each price range. C. different across each price range. D. less than one across each price range.
If, as some economists believe, changes in technology over recent decades have brought about changes in labor markets, then those changes likely have resulted in
a. reduced emphasis on compensating differentials as an explanation for wage differences. b. a reduced emphasis on human-capital differences among workers as an explanation for wage differences. c. a narrowing of the earnings gap between high-skilled workers and low-skilled workers. d. a widening of the earnings gap between high-skilled workers and low-skilled workers.
Total cost of production is the sum of total variable cost and total fixed cost. If the total fixed cost alone decreases:
A. the average total cost curve shifts upward at all output levels. B. the marginal cost curve shifts downward at all output levels. C. the vertical distance between the average total cost curve and the average variable cost curve decreases at all output levels. D. the average variable cost curve shifts downward at all output levels.
If a nation's Lorenz curve lies on the 45 degree line of income equality, then
A. every household's income level is different. B. more of the nation's income is received by the highest 25 percent of families than by the lowest percent. C. the income received by each 25 percent of families is 25 percent of the total income. D. more of the nation's income is received by the lowest 25 percent of families than by the highest 25 percent.