Should this firm be concerned if macroeconomic forecasters predict a recession? Explain
What will be an ideal response?
Based on income elasticity from this equation (0.1), no. The good is income inelastic, so a recession should not cause a significant decrease in sales. Note also that income is not statistically significant in this equation, making it even less of a concern.
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Betty and Wilma are the only two cashiers employed at a retail store. Each of them works the same 40 hours per week. By manually entering the price of each product purchased into the cash register, Betty can check out 20 customers and Wilma can check out 30 customers per hour. The store owner replaces the old cash registers with new ones that automatically scan product prices into the register. With the new cash registers, Betty and Wilma can each check out 60 customers per hour. Their average labor productivity as a team before the new cash registers were introduced was ________ customers per hour and ________ customers per hour after the new machines were installed.
A. 50; 60 B. 50; 120 C. 1,000; 2,400 D. 25; 60
The figure above shows Sally's budget line and one of her indifference curves. At point a, Sally's marginal rate of substitution is ________
A) 1/4 B) 4 C) 10 D) 40
Which one of the following is an area of continued disagreement among modern macroeconomists with regard to the use of fiscal policy?
a. Automatic stabilizers help reduce the fluctuations in aggregate demand and output. b. It is difficult to time changes in discretionary fiscal policy in a manner that will promote stability. c. Fiscal policy is much less potent than the early Keynesian view implied. d. Budget deficits are a highly effective tool with which to combat a severe recession.
Other things constant, countries with higher investment rates will
A) have lower standards of living. B) tend to have higher incomes in the future. C) have to use central government planning to allocate investment. D) have to impose high taxes in order to finance the investment.