Describe the relationship demonstrated by a production function
What will be an ideal response?
The production function shows the relationship between the level of output of a good and the factors of production that are inputs to production.
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The Phillips curve trade-off relationship implies that
A) there is no relationship between inflation and unemployment, at least in the long run. B) the government can fine-tune the economy and generate both the natural rate of unemployment and zero inflation. C) the government can fine-tune the economy and pick the most preferred combination of unemployment and inflation. D) low unemployment can be obtained only by generating rapidly increasing inflation.
The primary benefit of the automatic stabilizers is:
a. they provide public assistance through legislative decision making b. they require no new legislative action, so there is no legislative lag before these tools respond to fluctuations in the business cycle. c. they require legislative action, so there is a lag in response to these tools to fluctuations in the business cycle, and there is time to identify the spillover effects. d. none of the above.
The figure below depicts the short-run market equilibrium in a perfectly competitive market and the cost curves for a representative firm in that market. Assume that all firms in this market have identical cost curves.
In the long run equilibrium in this market:
A. price will equal $5, and there will be 20 firms in the industry. B. price will equal $5, and there will be 10 firms in the industry. C. price will equal $5 and total output will equal 500 units, but there is not enough information to determine how many firms will be in the industry. D. price will equal $8, and there will be 20 firms in the industry.
The law of one price means that prices eventually will be the same in all countries and eventually countries will not have a reason to trade.
Answer the following statement true (T) or false (F)