Although specialization of labor increases efficiency of production, another step is necessary
A. to exchange goods among producers.
B. to remain fully employed.
C. to a reallocation of natural resources.
D. to assure that exchange leads to mutual gains.
E. All of the responses are correct.
Answer: A
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Inflation may impose little, if any, cost on the economy, if ________
A) laws against excessive price increases are enforced effectively B) the government subsidizes menu costs C) price increases are fully anticipated D) the Fisher effect holds true E) the rate of price increase is so slow that people do not feel compelled to alter their behavior
Which of the following about potential GDP is true?
a. During a recession, actual GDP will exceed potential GDP. b. Actual GDP cannot exceed potential GDP, even for short periods. c. Actual output may be either above or below potential output depending on how fully resources are utilized. d. The economy's potential output is the maximum output that could be achieved temporarily during a time of economic boom.
Below, The graph on the left shows the short-run marginal cost curve for a typical firm selling in a perfectly competitive industry. The graph on the right shows current industry demand and supply.
What is the marginal revenue for the FIRM from selling the 250th unit of output?
A. $8 B. $4 C. $10 D. $6 E. zero
When demand decreases and the demand curve shifts to the left, equilibrium price ________ and equilibrium quantity ________.
A. increases; increases B. increases; decreases C. decreases; increases D. decreases; decreases