One of the key economic questions is "where should products be produced?"
Indicate whether the statement is true or false
FALSE
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The short-run Phillips curve shifts when there is a change in
a. technology b. money demand. c. the expected price level. d. the labor force. e. all of the above.
Suppose milk and cereal are compliments and the demand for milk is Qdm = 40 - 6Pm - 2Pc, where Qdm stands for millions of gallons of milk demanded, Pm stands for the price of milk and Pc stands for the price of cereal. The supply of milk is Qsm = 6Pm - 8, where Qsm stands for millions of gallons of milk supplied. The demand and supply of cereal are Qdc = 90 - 5Pc - Pm and Qsc = 5Pc - 10, respectively, where Qdc stands for millions of boxes of cereal demanded and Qsc stands for millions of boxes of cereal supplied. What is the general equilibrium quantity of milk?
A. 6.22 million gallons B. 1.48 million gallons C. Zero gallons D. 50.56 million gallons
Canada and the U.S. both produce wheat and computer software. Canada is said to have the comparative advantage in producing wheat if
a. Canada requires fewer resources than the U.S. to produce a bushel of wheat. b. the opportunity cost of producing a bushel of wheat is lower for Canada than it is for the U.S. c. the opportunity cost of producing a bushel of wheat is lower for the U.S. than it is for Canada. d. the U.S. has an absolute advantage over Canada in producing computer software.
If the economy is at full employment, then
A) the entire population is employed. B) the only unemployment is frictional unemployment plus discouraged workers. C) the entire labour force is employed. D) all unemployment arises from normal frictions and structural change. E) the unemployment rate is less than 3 percent.