If the money wage rate rises, then the
A) SAS curve shifts rightward.
B) SAS curve shifts leftward.
C) LAS curve shifts rightward.
D) LAS curve shifts leftward.
B
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The tendency of many economic variables to move together in a predictable way over the business cycle is called
A) recurrence. B) persistence. C) comovement. D) inflation.
The increase in total revenue due to increasing the amount of labor employed by one unit is called the
A) Marginal Product. B) Marginal Revenue Product. C) Average Revenue Product. D) Total Revenue Product.
Suppose capital and labor are perfect substitutes resulting in a production function of q = K + L. That is, the isoquants are straight lines with a slope of -1
Derive the long-run total cost function TC = C(q) when the wage rate is w and the rental rate on capital is r.
According to the misperceptions theory of aggregate supply, if a firm thought that inflation was going to be 5 percent and actual inflation was 6 percent, then the firm would believe that the relative price of what it produce had
a. increased, so it would increase production. b. increased, so it would decrease production. c. decreased, so it would increase production. d. decreased, so it would decrease production.