Suppose that an economy is currently experiencing 10 percent unemployment and 15 percent inflation. If in the process of bringing inflation down by 2 percentage points, real GDP falls by 6 percent for a year, the sacrifice ratio is
a. 5.
b. 2.
c. 12.
d. None of the above is correct.
d
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Refer to Figure 5-2. The size of marginal external costs can be determined by
A) S2 + S1 at each output level. B) the supply curve S1. C) the supply curve S2. D) S2 - S1 at each output level.
Tommy's Teddy Bears incurs $300,000 per year in explicit costs and $50,000 in implicit costs. The shop earns $600,000 in revenues and has $1.1 million in net worth. Based on this information, what is accounting profit for Tommy's Teddy Bears?
A) $250,000 B) $300,000 C) $500,000 D) $1.35 million
The above figure shows the cost curves for a typical firm in a market and three possible market supply curves. If there are 100 identical firms, the market supply curve is best represented by
A) curve A. B) curve B. C) curve C. D) either curve A or B, but definitely not C.
The country of Cedarland does not trade with any other country. Its GDP is $17 billion. Its government purchases $5 billion worth of goods and services each year and collects $6 billion in taxes. Private saving in Cedarland is $5 billion. For Cedarland,
a. investment is $6 billion and consumption is $7 billion. b. investment is $6 billion and consumption is $6 billion. c. investment is $7 billion and consumption is $7 billion. d. investment is $7 billion and consumption is $6 billion.