High unemployment is socially wasteful. Why?
High unemployment is socially wasteful. When the economy does not create enough jobs to employ everyone who is willing to work, a valuable resource is lost. Potential goods and services that might have been produced and enjoyed by consumers are lost forever. This lost output is the central economic cost of high unemployment, and we can measure it by comparing actual and potential GDP.
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Whenever marginal cost is positive, average cost curves are upward sloping.
Answer the following statement true (T) or false (F)
Assume no price ceiling exists and a market is in equilibrium. Then a price ceiling is established which is below the market equilibrium. What would result?
a. Shortage. b. Equilibrium. c. Surplus. d. Equity.
Imagine yourself to be a monopsonist producing strawberries in a small Florida farming community. a. You do not have to deal with the marginal revenue product of labor. b. You can control the price of the good. c. The wage rate is given to you and you can hire as many workers as you wish at that rate
d. You face an upward-sloping supply curve of labor and can choose any wage rate and labor combination shown on that curve. e. For your firm, labor is preferred to capital as a factor of production.
Which would increase aggregate supply?
a. A decline in productivity b. An increase in business regulation c. A decrease in the capital stock d. Lower business taxes