The above figure depicts an economy
A) with an inflationary gap.
B) with a recessionary gap.
C) producing at full employment.
D) None of the above answers is correct.
A
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Suppose that the firms in an oligopolistic industry successfully collude. What will be the outcome? Explain
What will be an ideal response?
You have been hired by the No Hassle Collection Agency to provide economic advice. The owner of the agency tells you that No Hassle's only variable input is the number of collection agents. The hourly wage for collection agents is $30.00. The marginal revenue product curve for collection agents reaches its maximum at five workers with a marginal revenue product of $34.00. What advice would you give this firm?
A. Hire collection agents until the marginal revenue product is equal to the wage-which will occur when more than five agents are employed. B. Hire five collection so as to maximize profits. C. Decrease the wage rate paid to collection agents so that their marginal revenue product will decrease. D. Shut down immediately, as the firm is not able to cover all of its variable costs.
Define GNI or Gross National Income
What will be an ideal response?
All mutually beneficial trades have taken place. This implies that
A) the production possibilities curve is bowed out. B) society is inside the production possibilities curve. C) economic efficiency prevails in the society. D) society is on the constant cost portion of its production possibilities curve.