In late 2008, the U.S. government extended unemployment insurance benefits for seven additional weeks, in recognition of the growing unemployment problem. This extension is an example of
A) automatic fiscal policy.
B) discretionary fiscal policy.
C) expansionary monetary policy.
D) supply-side fiscal policy.
Ans: B) discretionary fiscal policy.
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What is the last dollar rule for cost-minimization? Provide a brief explanation (in words) as well as the corresponding mathematical equality
If the firm is producing at a point where the isocost line is steeper than the isoquant, what does the last dollar rule imply (i.e., where is the last dollar most productive, L or K) and how should the firm alter its capital and labor in the long run?
If a firm's output equals 10, product price equals $5.00, TFC = $8.00, and TVC = $60.00, then ATC would equal
a. $.80 b. $1.00 c. $6.00 d. $6.80 e. $8.00
The supply curve of a natural resource like oil has a positive slope because
a. the supply becomes closer to exhaustion as demand rises. b. it becomes more costly to find and develop supplies as demand rises. c. rents rise as output increases. d. indirect taxes rise with output.
A natural monopoly is defined as an industry in which one firm
a. can produce the entire industry output at a lower average cost than a larger number of firms could. b. can produce the entire industry output at a lower marginal cost than a larger number of firms could. c. is very large relative to other firms that could enter the industry. d. can earn higher profits if it is the only firm in the industry rather than if other firms also enter the industry.