A person observes that consumer prices often fall when a nation experiences economic growth. The person then concludes that falling consumer prices leads to economic growth. This would be an example of:
A. The fallacy of composition
B. Biases
C. Confusing correlation and causation
D. The use of loaded terminology
Answer: C
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Which of the following explains why frictional unemployment exists in an economy?
A) It arises because job search is completely a supply side phenomenon in the labor market, and firms make no attempts to advertise for the vacancies they have. B) It arises because most of the workers shirk at work. C) It arises because it takes time for an unemployed worker to find a firm with a well-matched job vacancy. D) It arises because unemployment benefits encourage workers not to look for jobs.
A firm facing a downward-sloping demand curve sells 50 units of output at $10 each. The firm's marginal revenue is
a. $500 b. more than $10 but less than $500 c. $10 d. less than $10 e. zero
The narrowest definition of money is:
A. hard money. B. M1. C. M2. D. L.
In the short run, if a monopoly is forced to charge a price equal to marginal cost:
A) output will fall. B) the deadweight loss will decrease. C) consumer surplus will decrease. D) other firms will enter the industry.