Refer to Figure 8.5. If the actual wage in this economy is represented by w2, employment in this economy is represented by
A) L1.
B) L2.
C) L3.
D) 0.
A
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If a firm faces a downward-sloping demand curve, then:
A. the firm could be either a perfectly competitive firm or an imperfectly firm. B. the firm's production process exhibits economies of scale. C. the firm's marginal revenue from selling an additional unit of output is less than price. D. it is a perfectly competitive firm.
Suppose there are two small island countries: Avarice, which is populated by people who are completely self-interested, and Altruism, which is populated by people who have adopted social norms of generosity and cooperation. Commitment problems will be:
A. prevalent on both islands. B. largely avoided in Avarice, but prevalent in Altruism. C. largely avoided in Altruism, but prevalent in Avarice. D. largely avoided on both islands.
In the market for bank credit, a large bank sometimes announces a change in interest rates. After the changes in interest rates are announced, other banks in the industry usually react by changing their rates in the same way. This is an example of:
A. monopolistic competition. B. implicit collusion. C. the kinked demand curve model. D. a cartel.
Which statement best completes the following sentence; "The U.S. dollar is to the fifty states as the euro is to…"?
A. The National Central Banks B. The European System of Central Banks C. The European Central Bank D. The states of the European Monetary Union