When a firm incurs losses in the short run, the most important consideration in determining whether to continue producing is whether
a. marginal cost equals marginal revenue
b. average total cost is at its minimum
c. average variable cost is at its minimum
d. revenues cover some of its fixed costs and all of its variable cost
e. total revenue exceeds total cost
D
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An outward shift of the production possibilities curve demonstrates
A) economic growth. B) an increased rate of inflation. C) a cyclical shock. D) a recession.
During a recession, people drop out of the labor force because they are unable to find a job. All else the same, this
A) increases the official U-3 unemployment rate. B) decreases the official U-3 unemployment rate. C) does not change the official U-3 unemployment rate. D) increases the official U-3 unemployment rate and the labor force participation rate.
The positive slope of the per-worker production function illustrates the relationship between per-worker output and ________
A) diminishing marginal returns B) the capital-labor ratio C) the rate of inflation D) the rate of unemployment
Discuss the criticisms leveled against the Aid to Families with Dependent Children program