Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. Canada has the ________ opportunity cost of a pair of shoes than the United States, so: ________.
A. higher; Canada should specialize in apple production
B. higher; Canada should specialize in shoe production
C. lower; Canada should specialize in apple production
D. lower; Canada should specialize in shoe production
Answer: D
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A perfectly competitive firm will hire workers up to the quantity at which the wage rate equals the
A) marginal revenue product of labor. B) marginal factor cost of labor. C) price of the extra output produced. D) average physical product of labor.
If policymakers attempt to offset an adverse inflation shock with monetary ________, the resulting long-run equilibrium will be at ________ inflation rate compared to allowing the self-correcting mechanism return the economy to potential output.
A. easing; a higher B. tightening; a higher C. easing; a lower D. tightening; a lower
If the economy is represented in the graph shown and is currently at point E1, then the economy must be in:
A. long-run equilibrium. B. an economic boom. C. an economic recovery. D. a recession.
Which of the following conditions must be TRUE so that a firm can price discriminate?
A) There are no other firms in the market. B) The good is a nondurable. C) The good cannot be easily resold. D) All of the above.