Suppose a perfectly competitive firm, which is initially in long-run equilibrium experiences a decrease in the wages it must pay its employees. In the short run, which of the following will occur?
A) ATC will shift up and MC will shift down, causing the firm to incur a loss.
B) ATC will shift down and MC will shift up, causing the firm to earn a positive economic profit.
C) ATC and MC will shift down, causing the firm to earn a positive economic profit.
D) ATC and MC will shift up, causing the firm to incur a loss.
C
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Suppose the average nominal wage in an economy has increased by 22% in the last ten years. At the same time, the rate of inflation has been 13%. Which of the following statements is true?
A. In terms of the buying power of their wages, workers are better off. B. We do not have enough information to determine the buying power of the workers' wages. C. In terms of the buying power of their wages, workers are worse off. D. In terms of the buying power of their wages, workers are no better off now than ten years earlier.
The ________ the expected profit from holding a foreign currency, the greater is the ________ in the foreign exchange market
A) larger; quantity demanded of dollars B) smaller; quantity demanded of foreign currency C) larger; quantity supplied of dollars D) None of the above is correct because the expected profit has nothing to do with the supply and demand for dollars or foreign currency.
Refer to Table 2-1. Assume Tomaso's Trattoria only produces pizzas and calzones. A combination of 24 pizzas and 30 calzones would appear
A) along Tomaso's production possibilities frontier. B) inside Tomaso's production possibilities frontier. C) outside Tomaso's production possibilities frontier. D) at the horizontal intercept of Tomaso's production possibilities frontier.
Excessive unemployment of resources is illustrated using a production possibilities curve by: a. an inward shift of the curve
b. an outward shift of the curve. c. a movement along the curve in a northwest direction. d. a point inside the curve.