Costs that remain the same no matter what changes occur in usage or sales are
a. variable costs
b. semivariable costs
c. fixed costs
d. indirect costs
e. hidden costs
c. fixed costs
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If nominal wage rates increase by 5 percent per year and the price level increases by 3 percent per year, which of the following is correct?
a. Real wages will increase by 2 percent per year. b. Real wages will increase by 3 percent per year. c. Real wages will decrease by 3 percent per year. d. Real wages will decrease by 2 percent per year. e. Real wages will remain constant.
If the short-run Phillips curve has a very shallow (or flat) slope, a. the self-correcting mechanism cannot work
b. the structural deficit will grow in a recession. c. the structural deficit will fall in a recession. d. the inflation costs of reducing unemployment are fairly low.
According to most economists, the development of markets is:
A. both a necessary and a sufficient condition for development. B. a sufficient condition for development but not a necessary condition. C. a necessary condition for development but not a sufficient condition. D. neither a necessary nor a sufficient condition for development.
If firms in a monopolistically competitive market are earning positive profits, then
a. firms will likely be subject to regulation. b. barriers to entry will be strengthened. c. some firms will exit the market. d. new firms will enter the market.