Why does the labor market have more than one equilibrium wage rate?
a. Workers differ in their productivities.
b. Productivity of workers increases initially but later declines.
c. The labor demand curve is backward bending.
d. Marginal revenue product of different inputs used by firms vary.
e. Employers compete among themselves to hire the best workers.
a
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Describe, in general terms, how an economist calibrates a macroeconomic model. What statistics can be usefully examined to see how well the model corresponds to the data?
What will be an ideal response?
Which of the following statements about the monopolistically competitive market, in the long run, is true?
a. The resources are efficiently utilized. b. The firms make above-normal profit in the long run. c. The marginal-revenue curve coincides with the demand curve facing the firm. d. The firms produce the output level that is less than the output corresponding to the minimum of average total cost. e. The firms operate on the upward-sloping portion of the long run average cost curve.
Other things remaining the same, an increase in nominal GDP causes the velocity of money to:
a. Rise. b. Fall. c. Not change.
There is no shortage of scarce resources in a market economy because
a. the government makes shortages illegal. b. resources are abundant in market economies. c. prices adjust to eliminate shortages. d. quantity supplied is always greater than quantity demanded in market economies.