In order to get his bachelor's degree, Timothy gave up an offer for a full time job as a bartender. Therefore, Timothy incurred an opportunity cost.
Answer the following statement true (T) or false (F)
True
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In the long run all costs are variable costs. Why?
What will be an ideal response?
Which of the following is a solution to the problem of moral hazard in the labor market?
A) Provision of real wages B) Provision of nominal wages C) Provision of efficiency wages D) Provision of minimum wages
A perfectly competitive firm has to charge the same price as every other firm in the market. Therefore, the firm
A) faces a perfectly elastic supply curve. B) is not able to make a profit in the short run. C) faces a perfectly inelastic demand curve. D) is a price taker.
The creation of the European Monetary Union in 1999 lowered nominal interest rates in countries like Italy, because:
a. The creation of a supranational central bank reduced expected inflation. b. The supranational central bank increased the money supply rapidly, thereby causing interest rates to fall. c. Actually, interest rates in Italy exploded after the creation of the European Monetary Union, due to the lack of initial confidence in the European Central Bank. d. All of the above. e. None of the above.