The Keynesian short-run aggregate supply curve in the simplified Keynesian model is unrealistic because
A. prices and wages will never decrease.
B. some price adjustments do take place in the short run.
C. the classical model is better in explaining how the economy operates.
D. a vertical curve does not make economic sense.
Answer: B
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In part, microeconomics is concerned with
A) how a business firm decides upon the amount it produces and the price it sets. B) changes in the economy's total output of goods and services over long periods of time. C) factors that explain changes in the unemployment rate over time. D) the Federal Reserve's policy decisions.
If the inverse demand curve a monopoly faces is p = 100 - 2Q, then profit maximization
A) is achieved when 25 units are produced. B) is achieved by setting price equal to 25. C) is achieved only by shutting down in the short run. D) cannot be determined solely from the information provided.
In general, the production and use of capital ________ the productivity of labor and normally ________ wages.
A. diminishes; drives down B. has no effect on; has no effect on C. enhances; drives down D. enhances; drives up
Esther and Albert produce hamburgers and hot dogs. Esther can produce six hamburgers per hour or four hot dogs per hour. Albert can produce three hamburgers per hour or one hot dog per hour. Based on the scenario, Albert's opportunity cost for one hot dog is:
a. 3 hamburgers. b. 1 1/2 hamburgers c. 6 hamburgers d. 4 hamburgers