Which of the following statements is (are) correct? Critics of the real business cycle model
a. question whether technology has ever been the cause of a recession.
b. do not deny that some technology shocks affect many industries. However, they do not believe that there are enough of these shocks to explain recessions where output falls too as much as 10 percent below potential output.
c. argue that aggregate supply changes drive most business cycles.
d. All of the above
e. None of the above
B
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Adhira buys chocolates and almonds. She has 3 bars of chocolates and 4 bags of almonds. The marginal utility of the third chocolate bar is 18 units of utility and the marginal utility from the fourth bag of almonds is also 18
Is Adhira maximizing her utility? A) No, she must buy 1 more chocolate bar to equate her quantities of the two goods. B) No, she must cut back to 3 bags of almonds to equate her quantities of the two goods. C) No, without information on her income and the prices of the two goods, we cannot answer the question. D) Yes, the marginal utility from the last unit of each good is equal.
Unemployment is good from a social point of view because
A) it keeps wages in check. B) it allows for better matches between workers and firms. C) it provides free time. D) it keeps the least efficient workers out.
Omega Custom Cabinets produces and sells custom bathroom vanities. Assume that labor is the only input that varies for the firm. The firm has determined that if it hires 10 workers, it can produce and sell 20 vanities per week. If it hires 11 workers, it can produce and sell 22 vanities per week. It sells each vanity for $800, and it pays each of its workers $1,000 per week. Which of the
following is correct? a. For the 11th worker, the marginal profit is $600. b. For the 11th worker, the marginal revenue product is $2,000. c. The firm is maximizing its profit. d. If the firm is employing 11 workers, then its profit would increase if it cut back to 10 workers.
So in equilibrium
What will be an ideal response?