All other things equal, if the price of foreign-made cars rises, then the GDP deflator:
A. and the CPI will rise by equal amounts.
B. will rise and the CPI will remain the same.
C. will remain the same and the CPI will rise.
D. and the CPI will rise by different amounts.
Ans: C. will remain the same and the CPI will rise.
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A mismatch of the skills of unemployed workers and the skills required for existing jobs is defined as:
a. involuntary unemployment. b. cyclical unemployment. c. structural unemployment. d. frictional unemployment.
Suppose that Carla's Candy Shop finds that at the current level of output, marginal revenue is below marginal cost and average variable cost is below price. If the market price is held constant, Carla's Candy Shop should __________ in order to maximize profits
a. raise output b. reduce its price c. reduce output d. close down e. maintain its current output level
For some products, purchases tend to decrease as the buyer's income increases. Such products are known as:
a. Normal goods b. Inferior goods c. Inverse goods d. Common goods
For a product with an external cost, the supply curve
A) represents the various quantities people can buy. B) is the same as the marginal private cost curve. C) is the same as the marginal social cost curve. D) is the same as the marginal external cost curve. E) is undefined.