Joe runs a business and needs to decide how many hours to stay open. Figure 2.2 illustrates his marginal benefit of staying open for each additional hour. Suppose that Joe's marginal cost of staying open per hour is $24. How many hours should Joe stay open?
A. 3 hours
B. 4 hours
C. 5 hours
D. 6 hours
Answer: D
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Unemployment that results from a mismatch between worker qualifications and the characteristics employers require is called _________ unemployment.
A. cyclical B. frictional C. search D. structural
If the elasticity for yachts is three, a tax on yachts will ___________ total revenue.
Fill in the blank(s) with the appropriate word(s).
In the classical model where aggregate supply is vertical with respect to the price level, an increase (shift) in aggregate demand will yield
A. a relatively large increase in output. B. an equal change in output. C. a relatively large increase in the price level. D. a relatively small change in the price level.
Consider two countries, Estonia and Ukraine. Estonia devotes a larger portion of its production to capital. All other things equal, which of the following statements is most likely true?
A. Estonia's production possibility frontier will shift up and out farther and faster than Ukraine's. B. Estonia will move up its production possibility curve faster than Ukraine. C. Estonia is a poorer country than Ukraine. D. Ukraine is producing inside its production possibility frontier, whereas Estonia is producing at a point on its production possibility frontier.