According to classical economists, in recessions, not only does the unemployment rate increase, so does the
A) interest rate.
B) level of fiscal stimulus.
C) natural rate of unemployment.
D) level of potential output.
C
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An economist says: "The demand curve has two interpretations." What does the economist mean?
What will be an ideal response?
The cross elasticity of demand for pizza with respect to the price of a soda is
A) positive because the goods are complements. B) negative because the goods are complements. C) positive because the goods are substitutes. D) negative because the goods are substitutes.
Refer to Table 11-9. Clock It To Me manufactures clock radios. The table above shows estimates of fixed cost per period and average variable cost for three possible plant sizes
a. You are employed as the company's cost accountant and have been asked to prepare cost estimates for various output levels for each of the three possible plant sizes. Record your calculations in the table below. Average Cost of Production 5,000 Clock Radios 8,000 Clock Radios 20,000 Clock Radios Small plant Medium plant Large plant b. For each of the three output levels, which plant size will generate the lowest average total cost of production? c. Suppose the firm currently sells 8,000 clock radios per period (using the optimal plant size for this output level). Now, however, it has just secured a long-term contract to supply 20,000 clock radios per period. In the short run, what is the average total cost of producing 20,000 clock radios? Provide a numerical value based on your answer in part a. d. What happens to average total cost of production in the long run? Provide a numerical value based on your answer in part a.
Merit goods are
a. goods that everyone wants b. goods that are rewards for appropriate behavior c. the same as public goods d. goods that some people think we need more of e. only produced by the government