Say's Law implies that:
A. Wages and prices are fixed.
B. Full employment equilibrium is unlikely.
C. Whatever is produced will be sold.
D. Unemployment causes inflation.
C. Whatever is produced will be sold.
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Suppose firms A and B each make T-shirts. Firm A's production function is q = L0.5K0.5. Firm B's production function is q = 1.2 ? L0.5K0.5
If the two firms each hire the same amounts of capital and labor, compare the two firms in terms of APL and MPL.
What does a production possibilities curve show?
What will be an ideal response?
In the United States during the Vietnam War era, as military spending increased:
A. unemployment dropped to very low levels. B. both frictional and cyclical unemployment increased. C. frictional unemployment dropped, but cyclical unemployment increased. D. overall unemployment rates did not change.
If the hourly wage of German workers is $6, the hourly wage of Canadian workers is $10, and German workers produce half as much output per hour as Canadian workers, all else equal, it would be efficient to locate production facilities in:
A. Canada since the cost per unit of output will be higher. B. Canada since the cost per unit of output will be lower. C. Germany since the cost per unit of output will be higher. D. Germany since the cost per unit of output will be lower.