A change on the extensive margin occurs when
A. people who were employed decide to decrease their hours worked.
B. people drop out of the labor force after being unemployed.
C. people who were unemployed decide to take jobs.
D. people who were employed decide to increase their hours worked.
Answer: C
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Suppose a developing country experiences a reduction in machinery and capital equipment as foreign entrepreneurs decrease the amount of investment in the economy. As a result,
A) the economy will move up along the long-run aggregate supply curve. B) the long-run aggregate supply curve will shift to the left. C) the long-run aggregate supply curve will shift to the right. D) the economy will move down along the long-run aggregate supply curve.
A family on a trip budgets $800 for meals and gasoline. If the price of a meal for the family is $50, how many meals can the family buy if they do not buy any gasoline?
a. 8 b. 16 c. 24 d. 32
The intersection of supply and demand in the capital market determines the market equilibrium price and quantity in the:
A. purchase market. B. both the rental and purchase markets. C. rental market. D. Any of these statements could be true.
Suppose your bank pays you 4 percent interest per year on your savings account, so that $1,000 grows to $1,040 over a one-year period. If prices increase by 1 percent per year over that time, approximately how much real value do you gain by keeping $1000 in the bank for a year?
A. $0 B. $10 C. $30 D. $50