When economists speak of changes in GDP measured in constant dollars, they mean that
What will be an ideal response?
a price index has been used to adjust money GDP for the effects of inflation.
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Data in the following table refer to the purchase of a resource by a pure monopsonist. Let the resource be labor time L, measured in hundreds of hours per day
Units of Labor Marginal Average Marginal Revenue Input Expenditure Expenditure Product L ME AE MRP 1 10 10 16 2 12 11 15 3 14 12 14 4 16 13 13 5 18 14 12 6 20 15 11 7 22 16 10 8 24 17 9 a. Determine the profit maximizing purchase rate of labor for the monopsonist. b. If this market were not monopsonistic but competitive, what would be the purchase rate of labor time? c. Determine the equilibrium wage rate in both the monopsonistic and competitive markets?
Since the beginning of the millennium, the United States has witnessed closure of many Internet start-up companies. According to the model of perfect competition, these companies must have shut down in the short run because:
a. the price they were charging was too high to attract customers. b. the price they were charging was too low to provide sufficient revenues. c. they were not earning enough revenue to cover their total costs. d. they were not earning enough revenue to cover their total variable costs. e. they were not earning enough revenue to cover their total fixed costs.
Any point on a country's production possibilities frontier represents a combination of two goods that an economy
a. will never be able to produce. b. can produce using all available resources and technology. c. can produce using some portion, but not all, of its resources and technology. d. may be able to produce in the future with more resources and/or superior technology.
Which of the following, if true, would most effectively back the argument that raising cigarette taxes reduces the number of people who smoke cigarettes?
A. The supply for cigarettes is relatively elastic. B. The demand for cigarettes is relatively elastic. C. The supply for cigarettes is relatively inelastic. D. The demand for cigarettes is relatively inelastic.