When the unemployment rate is on the horizontal axis and the real wage is on the vertical axis, a reduction in productivity will cause which of the following to occur?
A) The wage-setting and price-setting curves will both shift downward.
B) The wage-setting and price-setting curves will both shift upward.
C) The price-setting curve to shift downward, and no shift in the wage-setting curve.
D) The wage-setting curve to shift upward, and the price-setting curve to shift downward.
E) The wage-setting curve to shift downward, and the price-setting curve to shift upward.
A
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Refer to Figure 1A.2. The slope of the curve
A) is positive. B) is negative. C) is zero. D) changes along the curve.
Production functions A and B result in the same average total costs of production. However, production function A is twice as capital intensive as production function B. In this case, all else constant:
A) marginal costs will be higher in A than they are in B. B) marginal costs will be higher in B than they will in A. C) because total costs are equal, marginal costs will be equal for the two production functions as well. D) there is no way to say anything about the relative marginal costs of production in the two production functions without additional information.
The kinked demand curve is always associated with ___________ competition.
Fill in the blank(s) with the appropriate word(s).
If a monopolistically competitive firm is suffering losses in the short run:
A. the exit of competing firms will cause price to drop, but not affect the firm's demand curve. B. the exit of competing firms will shift the firm's demand to the right. C. the exit of competing firms will shift the firm's demand to the left. D. the exit of competing firms will cause price to rise, but not affect the firm's demand curve.