If the long-run supply curve of a purely competitive industry slopes upward, this implies that the prices of relevant resources:
A. will fall as the industry expands.
B. are constant as the industry expands.
C. rise as the industry contracts.
D. rise as the industry expands.
Answer: D
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If inflation is eight percent, a nominal interest rate of six percent translates into a real interest rate of two percent
Indicate whether the statement is true or false
As demonstrated by the labor supply schedule, the quantity of labor supplied depends on
A) workers' productivity. B) the value of the dollar. C) the nominal wage. D) the amount of labor that firms want to hire. E) the real wage.
Suppose that the Australian economy initially uses 50 billion hours of labor to produce $5 trillion of real GDP. If 50 billion more hours are employed and Australia's real GDP increases by $4 trillion more,
A) Australia's production function exhibits diminishing returns. B) Australia's production function exhibits increasing returns. C) Australia has an Okun Wedge of $1 trillion. D) Australia has positive Lucas Wedge. E) Australia's production possibility frontier has a positive slope.
If people generally believe that "you get what you pay for," it is reasonable for them to:
A. make every effort to get complete information about a product before making a purchase to make sure that the purchase is optimal. B. assume that a cheaper brand is always a better deal than expensive brands. C. assume that an expensive item is of higher quality, creating the possibility of an upward-sloping demand curve. D. assume that an expensive item is of higher quality, which eliminates the possibility of an upward-sloping demand curve.