An expansionary gap generally creates inflationary pressure in an economy
a. True
b. False
Indicate whether the statement is true or false
True
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According to the economic way of thinking, government officials tend to vote on legislation that
A) concentrates benefits on a well-organized group. B) disperses costs throughout a great number of politically unorganized people. C) generates short-term benefits and postpones the costs. D) does all of the above. E) does none of the above.
Exhibit 6-15 Long-run average cost
?
In Exhibit 6-15, diseconomies of scale are shown in the range of:
A. 0 to 500 units per week. B. 500 to 1,000 units per week. C. 1,000 to 2,000 units per week. D. zero per week.
If the income effect of a wage change outweighs the substitution effect of a wage change, the labor-supply curve is
A. upward sloping. B. backward bending. C. vertical. D. horizontal.
Suppose you know I am only about consumption this year and consumption next year. Suppose also that I have an income this year but do not expect to have an income next year. Explain your answers. ? a. You notice that I save more after the interest rate falls. Can you tell whether "consumption now" is a normal, inferior or Giffen good? ? b. Suppose I also received an unexpected raise at work and you overhear me say: "Cool, I am even Steven. Now that I have my raise, I am just as happy as I was before the interest rate fell and I did not yet have a raise." Without knowing anything more, can you tell whether I consume more or less next year than I would have consumed had neither of the two changes happened?
What will be an ideal response?