By 2010, the U.S. economy had emerged from the recession that had begun in 2007. Despite an economic growth rate well above zero, unemployment showed little sign of declining much below ten percent
Focusing on the definition of the unemployment rate, explain how it is possible to have positive economic growth without declining unemployment.
To lower the unemployment rate, the number of people who are out of work and looking for a job must decline faster than the number of people in the labor force. As growth accelerates at the end of a recession, many people who had left the labor force return as job seekers, which raises the unemployment rate (the effect on the numerator is larger than the effect on the denominator).
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Economic regulation aims to control the price, output, the entry of new firms, and the quality of service in industries in which monopoly appears inevitable or even desirable
a. True b. False
Nominal values are values measured in terms of the prices at which goods and services are actually sold
a. True b. False Indicate whether the statement is true or false
Which of the following statements about collusion is true?
a. Collusion is legal in the United States. b. Its overriding goal is to enhance competition and thereby increase profits. c. The greater the number of firms, the less difficult it is to maintain a collusion. d. Collusion never results in benefits for the participants. e. Collusion may help to increase the profits of the participating firms.
Exhibit 8-15 Short-run cost curves for E-Z Care lawn mowing company
In Exhibit 8-15, suppose the market price of mowing lawns falls to $10 per lawn. In this situation, E-Z-Care will:
A. permanently exit the industry. B. shut down its operations, at least in the short run. C. continue to mow lawns in the short run despite its economic losses. D. earn a normal profit.