In the perfectly competitive market, the labor supply curve faced by the individual firm is ________, while that of the market is ________.
A. perfectly inelastic; upward sloping
B. perfectly inelastic; perfectly elastic
C. perfectly elastic; upward sloping
D. perfectly elastic; perfectly inelastic
Answer: C
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According to some economists and policy makers, the solution to Spain’s high youth unemployment is to
a. reduce government-mandated wages, which would allow it to reduce government spending. b. increase government-mandated wages, which would allow it to reduce government spending. c. increase government-mandated wages, which would allow it to increase government spending. d. reduce government-mandated wages, which would allow it to increase government spending.
If Country A has an absolute advantage over Country B in the production of every commodity,
a. mutual gains from trade between Country A and Country B would be impossible. b. Country B would be able to gain from trade but not country A. c. the joint output of the two countries could not be increased through specialization and exchange. d. mutual gains from trade would still be possible.
The fact that output gaps will not last indefinitely, but will be closed by rising or falling inflation is the economy's:
A. income-expenditure multiplier. B. self-correcting property. C. short-run equilibrium property. D. long-run equilibrium property.
If business people become more pessimistic about the future, we would expect that
A. investment spending would increase. B. the saving function would shift up. C. the consumption function would shift up. D. the investment curve would shift inward to the left.