In the classical model, a temporary decrease in government spending would cause a decrease in
A. output, employment, real wages, and the price level.
B. employment, the real interest rate, real wages, and the price level.
C. output, the real interest rate, real wages, and the price level.
D. output, employment, the real interest rate, and the price level.
Answer: D
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The Federal Drug Administration slows the pace at which helpful medications reach the marketplace. The alternative of having the medication available to consumers earlier is an example of:
A. the opportunity cost of the Federal Drug Administration's regulation. B. how easy it is to identify and evaluate sunk costs. C. the marginal benefit of the Federal Drug Administration’s regulation. D. promoting consumer health in the population.
If a perfectly competitive firm made an economic profit in the short run, but not in the long run, it must be true that
a. prices for inputs increased b. demand declined c. new firms entered, supply increased, and price fell d. accounting profit exceeds economic profit e. labor costs are increasing
Other things being equal, the increase in rents that occurs after rent controls are abolished is smaller when:
A.rented homes and owned homes are substitutes. B. rented homes and owned homes are complements. C. the own price elasticity of demand for rental homes is price inelastic. D. the own price elasticity of demand for rental homes is price elastic. E. the own price elasticity of demand for rental homes has unitary price elasticity.
Efficiency wages, minimum-wage laws, and unions all keep wages
a. below the equilibrium level, causing a shortage of labor. b. below the equilibrium level, causing a surplus of labor. c. above the equilibrium level, causing a shortage of labor. d. above the equilibrium level, causing a surplus of labor.