Gordon presents several modern business cycle theories. He clearly states after all have been explained that he believes the most plausible of them to be the ________ model
A) Lucas information-barrier
B) Friedman fooling
C) New Keynesian
D) real business cycle
C
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Linking policy instruments to target variables are the
A) indices of economic welfare. B) structural economic relations. C) exogenous nonpolicy variables. D) irrelevant side effects.
A constant-cost, perfectly competitive market is in long-run equilibrium. At present, there are 1,000 firms each producing 400 units of output. The price of the good is $60. Now suppose there is a sudden increase in demand for the industry's product
which causes the price of the good to rise to $64. In the new long-run equilibrium, how will the average total cost of producing the good compare to what it was before the price of the good rose? A) The average total cost will be higher than it was before the price increase since the increase in demand will drive up input prices. B) The average total cost will be lower than it was before the price increase because of economies of scale. C) The average total cost will be higher than it was before the price increase because of diseconomies of scale arising from the increased demand. D) The average total cost will be the lower than it was before the price increase as output increases.
The slope of the isoquant is
A. the marginal rate of technical substitution. B. negative. C. -MPL/MPK. D. All of the above are correct.
In the above figure, Reggie's budget line rotates outward from BL1 to BL2. He initially consumes at point A. If his new consumption bundle is at point B, this implies that kiwi fruit and mangoes are
A) both lower in price. B) both inferior goods. C) neither substitutes nor complements. D) None of the above answers is correct.