Refer to the graph shown.
Which of the graphs correctly depict the short-run Phillips curve in the standard model, without trade?
A. A
B. B
C. C
D. D
Answer: B
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In 1 hour, Robinson Crusoe can either shoot 4 birds or catch 4 fish. A typical native on a nearby island can either shoot 5 birds or catch 10 fish in an hour's time. Which of the following is true according to the doctrine of comparative advantage?
a. Crusoe will be better off if he specializes in either activity and then trades with the natives. b. The natives have a comparative advantage in both shooting birds and catching fish, so Crusoe cannot make himself better off by trading with the natives. c. Crusoe should concentrate on shooting birds and then trade with the natives to obtain fish. d. Crusoe should spend his time catching fish, and he should trade with the natives to obtain birds.
Answer the following statements true (T) or false (F)
1. The break-even point on a break-even chart is equivalent to the point where MR = MC on a cost/output graph. 2. It may be beneficial for a firm that is suffering a loss to continue to operate in the short run as long as it is recovering its fixed cost. 3. Any revenue over and above total cost is labeled economic profit. 4. Wages paid are an example of an explicit cost of doing business. 5. Marginal cost is equal to the increase in total cost per unit of input divided by marginal product. 6. Under perfectly competitive conditions, marginal revenue is equal to the price at which a good is sold. 7. Average total cost is equal to total cost divided by marginal product. 8. Normal profit is considered an opportunity cost of operating a business.
Based on the graph showing how the subprime share of home mortgages grew rapidly before the big decline, at the peak of the use of subprime loans in 2005, the gap between the share of subprime mortgages and adjustable mortgage rates was ______ the typical historical difference.
a. perfectly in line with
b. slightly smaller than
c. slightly greater than
d. dramatically greater than
Describe the Mexican peso crisis in terms of the imbalances that caused it, the policies Mexico used to respond, and the lessons learned
What will be an ideal response?