Which of the following is NOT a macroeconomic question?
A. Should we have a constitutional amendment requiring the federal government to balance the budget each year?
B. Should restaurants be required to list the number of calories for each product on their menus?
C. How does a fiscal stimulus package affect gross domestic product?
D. Should Congress enact tougher immigration laws to reduce unemployment?
Answer: B
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The table above gives data for the nation of Mosh. If real GDP is $10 trillion, then
A) firms increase production because inventories are less than their target levels. B) firms decrease production because inventories exceed their target levels. C) the economy has reached equilibrium and no change in production will occur. D) firms decrease production because inventories are less than their target levels. E) We need more information to determine whether firms increase, decrease, or do not change their production.
Monopolies may earn positive economic profits in
a. only the short run. b. the short run or the long run. c. only the long run. d. never.
Market prices provide information to consumers, helping them coordinate their activities so long as which of the following conditions is met?
a. Prices are legally kept equal in all markets, preventing unfair price increases in markets with shortages and unfair price decreases when a market surplus is present. b. The government carefully screens producers and effectively keeps inefficient producers out of the market. c. Prices are not allowed to rise too high, causing a shortage. d. Competition is present and buyers and sellers are free to choose mutually agreeable prices.
Assume that the price of silk ties in a perfectly competitive market is $21 and that the typical firm confronts the following costs:
a. What is the profit-maximizing rate of output for the firm? (Use the profit-maximizing rule.) b.. How much profit does the firm earn at that rate of output? c. If the price of ties falls to $7, how many ties should the firm produce? d. At what price should the firm shut down?