In the 1980s, the dangerous Ebola virus entered the United States through contaminated monkeys that were imported for use in medical experiments. Suppose this virus had not been contained but had spread to the general population. Assume that the virus is lethal in half of the people who are exposed to it. Describe the resulting effect on labor productivity
There are two possible direct effects: One effect would be that people would be absent from work if they caught the virus (but did not die) and so marginal productivity would be higher for the remaining workers. The other effect is that people who caught the virus would die, the labor supply would decrease, and the remaining workers would have a higher marginal product of labor. While the marginal productivity of the remaining workers increases, total output would still fall.
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Unemployment that is caused by business recessions is called
A) frictional unemployment. B) cyclical unemployment. C) seasonal unemployment. D) structural unemployment.
Which of the following approaches should the Fed use if it experiences large lags and mistakes in monetary policy?
A. Discretionary policy B. An eclectic approach C. Fixed rules D. Fiscal policy
Which of the following is NOT characteristic of a perfectly competitive market?
A.) firms are price takers B.) a significant degree of brand loyalty for each firm C.) low barriers to entry D.) many firms
The argument that many critics of free trade have suggested that genetic engineering of plants and animals could lead to accidental production of new diseases is the
A. protecting domestic jobs argument. B. environmental and safety argument. C. infant industry argument. D. national security argument.