For this question, assume that expectations of P and A are correct. Now suppose that there is a 4% increase in A. Given this information, which of the following will occur?
A) The PS relation will shift up by 4%.
B) The WS relation will shift up by less than 4%.
C) The WS relation will shift down by 4%.
D) The PS relation will shift down by 4%.
A
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If marginal cost increases when output increases, then
A) marginal product must decrease when output increases. B) average fixed cost is constant. C) total cost is constant. D) average variable cost must increase when output increases. E) average total cost must decrease when output increases.
The present value of $1,500 received 8 years in the future would be calculated as which of the following when the interest rate is 3%?
A) 1,500/(1.03)8 B) 8.03/1,500 C) 1,500 × 1.3 × 8 D) 1,500/(1.3)8
Which of the following is characteristic of a monopolistically competitive firm?
a. The firm faces an upward-sloping demand curve. b. The firm faces an inelastic demand curve. c. The firm faces a horizontal demand curve. d. The firm produces a differentiated product.
A tremendous flood along the Mississippi River destroys thousands of factories, reducing the nation's capital stock by 5%. What happens to current employment and the real wage rate?
A. Both employment and the real wage rate would increase. B. Both employment and the real wage rate would decrease. C. Employment would increase and the real wage would decrease. D. Employment would decrease and the real wage would increase.