Those who believe that wages adjust quickly to clear the labor market also believe that
A. the AS curve is upward sloping.
B. the AD curve is flat.
C. the AD curve is steep.
D. the AS curve is vertical.
Answer: D
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Oil refiners can refine a barrel of petroleum so that it yields either more home heating oil or more diesel fuel. If the price of diesel fuel falls, there is
A) an increase in the supply of home heating oil. B) a decrease in the supply of home heating oil. C) an increase in the quantity of home heating oil supplied. D) a decrease in the quantity of home heating oil supplied. E) an increase in the demand for home heating oil.
Use the economic way of thinking to answer the following question: Does a diabetic need insulin?
A) No B) Yes, and therefore diabetics will always buy all what they need. C) Probably, but diabetics often find substitutes for insulin in the real world. D) Probably, but diabetics only care about the expected cost of insulin and ignore the expected benefits.
If a production technology has diminishing marginal product of all inputs throughout, then the producer choice set is convex.
Answer the following statement true (T) or false (F)
The age-earning cycle shows an individual typically earning
A) a constant income (adjusted for inflation) over the entire working life of the worker. B) an income that cycles upward and downward as an individual ages. C) an income that increases with age, peaks, and then falls as retirement approaches. D) an income that declines until age 30-35 and then increases rapidly.