Refer to the above diagram. Assume that G and T1 are the relevant curves, the economy is currently at A, and the full-employment GDP is B. This economy has:
A. neither a surplus nor deficit in the actual budget.
B. a cyclically adjusted budget deficit.
C. an actual budget deficit.
D. an actual budget surplus.
Answer: A
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On the Lorenz curve, which of the following indicates that income inequality has increased from Year A to Year B?
a. The Year B line is to the left of the perfect equality line, and the Year A line is to the right. b. The Year A line is longer than the Year B line. c. The Year B line is farther from the perfect equality line than is the Year A line. d. The Year A line is farther from the perfect equality line than is the Year B line.
A construction company has built 30 houses so far this year at a total cost to the company of $7.5 million. If the company builds a 31st house, its total cost will increase to $7.76 million. Which of the following statements is correct?
a. For the first 30 houses, the average cost per house was $250,000. b. The marginal cost of the 31st house, if it is built, will be $260,000. c. If the company can experience a marginal benefit of $275,000 by building the 31st house, then the company should build it. d. All of the above are correct.
Exhibit 8-15 Short-run cost curves for E-Z Care lawn mowing company
In Exhibit 8-15, suppose the market price of mowing lawns falls to $10 per lawn. In this situation, E-Z-Care will:
A. permanently exit the industry. B. shut down its operations, at least in the short run. C. continue to mow lawns in the short run despite its economic losses. D. earn a normal profit.
A monopsonist is currently employing 50 workers at $10 an hour. It wants to hire an additional worker, but will have to pay the worker $10.10. The marginal factor cost is
A) ten cents. B) $10.00. C) $10.10. D) $15.10.