In the figure above, firms
A) pay taxes directly to governments.
B) sell goods and services to governments in goods markets.
C) receive transfers from governments through factor markets.
D) own factors of production.
E) do all of the above.
A
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To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.
Unemployment arising from a persistent mismatch between the skills and characteristics of workers and the requirements of jobs is called
A) unnatural unemployment. B) seasonal unemployment. C) structural unemployment. D) cyclical unemployment. E) frictional unemployment.
Figure 9-1 shows the marginal cost and average total cost curves for a perfectly competitive firm. If the market price is $10, then
a.
the firm earns $10 profit on each unit sold
b.
the firm earns $8 profit on each unit sold
c.
marginal revenue equals $10
d.
the firm is losing money in the short run
e.
marginal cost always equals marginal revenue
Prices in a market economy perform a rationing function because they reflect
A) the demand of all buyers in the market. B) the extent to which the goods are necessities. C) the strength of the supply curve. D) the relative scarcity of the goods.