When resources are being used wastefully or inefficiently, the
What will be an ideal response?
economy is operating at a point inside its production possibilities constraint.
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Suppose at the going wage rate of $20 per hour, firms can hire as many hours of janitorial services as they desire. If any firm tries to lower the wage rate to $19, it will not be able to hire any janitor
What does this indicate about the supply curve for janitorial services? A) Supply is relatively inelastic. B) Supply is perfectly elastic. C) Supply is unit-elastic. D) Supply is perfectly inelastic.
If total consumption spending is $1,000, the marginal propensity to consume is 0.6, and total output is $2,000, then the constant term is
A) $800. B) $1,000. C) $2,000. D) $1,200.
Firms that make game systems like Playstation and Nintendo typically charge a price close to average cost on the game system itself, and do not change that price even when the systems are scarce or demand increases
Why might this be a profit-maximizing strategy?
Assume that the current market price is below the market clearing level. We would expect:
A) a surplus to accumulate. B) downward pressure on the current market price. C) upward pressure on the current market price. D) lower production during the next time period.