A firm should never produce any output if
A. AR < ATC.
B. P < AVC.
C. P < ATC.
D. MR < MC.
Answer: B
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The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.
In the worker's leisure/consumption model, the wage is the same as the price of consumption.
Answer the following statement true (T) or false (F)
Straight line pay for performance
a. Provides an incentive to increase performance b. Breaks the link between meeting a particular budget target and compensation c. Rewards the manager for doing more and punishes them for doing less d. All of the above
As the economy goes through an expansion,
a. fluctuations in GDP become more severe b. unemployment finally stabilizes c. investment stabilizes d. the classical model becomes a better predictor e. unemployment falls.