Reducing involuntary unemployment:
a) Helps the economy move on to the Production Possibility Frontier
b) Helps shift the economy's Production Possibility Frontier inwards
c) Helps the economy move along its Production Possibility Frontier
d) Helps the economy move inside the Production Possibility Frontier
Answer: a) Helps the economy move on to the Production Possibility Frontier
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If marginal revenue equals marginal cost in the short run, the perfectly competitive firm earns zero profits
a. True b. False Indicate whether the statement is true or false
In the classical model, a falling demand for labor will
a. not cause unemployment because the labor market always clears b. cause a recession with lower employment and a lower real wage c. cause a recession with lower employment and an increasing real wage d. cause a recession with lower unemployment and a lower real wage e. cause a recession with higher employment and an increasing real wage
Scarce resources are ultimately allocated toward the production of goods most wanted by society because:
A. firms attempt to maximize profits. B. they are most efficiently utilized in these areas. C. managers are benevolent. D. consumers demand inexpensive goods and services.
The figure below represents the domestic market for wheat in a small country. Imports of wheat are prohibited.
With an export subsidy of $20 per bushel, the cost to the government of paying the export subsidy is
A. $600 million. B. $2.2 billion. C. $3 billion. D. $1.2 billion.