Refer to Table 10.1. If the price of output is $2 per unit and we observe the firm hiring six workers, if the firm is maximizing profit, the wage rate must be between ________ and ________.
A. $20; $40
B. $30; $50
C. $40; $60
D. $500; $600
Answer: C
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According to the new Keynesian theory, the widespread importance of small menu costs results in variations in aggregate demand causing both
A) smaller short-run adjustments in real GDP and immediate adjustment in the price level. B) smaller short-run adjustments in real GDP and delayed adjustment in the price level. C) greater short-run adjustments in the real GDP and immediate adjustment in the price level. D) greater short-run adjustments in real GDP and delayed adjustment in the price level.
Chance goes to a used car lot and sees the kind of car he wants, in prime condition, priced about $7,000 lower than it should be. Based on the lemon problem, why does Chance decide not to buy it?
a. He feels that he is taking advantage of the dealer. b. He fears something is wrong with the car that he is unaware of. c. He knows he will have to make up the price difference in sales tax. d. He realizes other dealers will also be willing to sell it even cheaper.
Policy makers:
A. dislike inflation because it redistributes income. B. dislike inflation because it allows individuals to maintain illusions. C. like inflation because it allows individuals to maintain illusions. D. like inflation because it makes society richer.
The total utility of consuming 6 units of a good is 255. The marginal utility of the 6th unit is 45 and the marginal utility of the 5th unit is 65. The total utility of consuming 5 units of the good is
A. 150. B. 210. C. 195. D. 300.