Average fixed costs rise continuously as quantity of output rises.
a. true
b. false
b. false
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Consider a worker who consumes a composite consumption good (on the vertical axis) and leisure hours (on the horizontal axis).
a. Suppose the worker has 80 hours of leisure per week and can earn a wage of $50 per hour. Illustrate the worker's weekly budget constraint. b. In order to close the deficit, the government introduces a broad-based consumption tax on all consumer goods -- raising the price of the consumption good by 20%. Illustrate the new budget constraint faced by our worker. c. On your graph, indicate the level of tax revenue raised by this broad-based consumption tax. d. Using your graph, discuss why this tax is inefficient. e. In this model is there any difference between the consumption tax and a wage tax? What is different about the real world that would change your conclusion about this? What will be an ideal response?
The figure above shows a nation's production possibilities frontier for apples and oranges
a) What combination of goods is represented by point A? b) What combination of goods is represented by point B? c) Which point represents an unattainable combination of goods?
A New Keynesian firm chooses
A) its selling price and how much it sells at that price. B) its selling price but not how much it sells at that price. C) how much it sells but not the selling price. D) neither how much it sells nor the selling price.
The fundamental economic problem is: a. poverty
b. unemployment. c. scarcity. d. inflation.