Within the framework of the Keynesian model, if spending is abnormally low,
a. the economy will be in equilibrium at full employment, but inflation will be high.
b. equilibrium output will be less than the full-employment rate of output.
c. the equilibrium output rate will exceed the economy's full-employment capacity.
d. the actual rate of unemployment will be less than the natural rate of unemployment.
B
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The opportunity cost of producing one additional truck is
A. the profit that could have been earned from selling that truck. B. the amount of other goods that could not be produced because productive resources were used instead to produce that truck. C. the price of the truck. D. all of the choices are true.
If production of an item results in negative external costs, then
A) the market price is below the socially preferred price that reflects the external costs. B) the market price is above the socially preferred price that reflects the external costs. C) market forces will always correct the problem. D) the market quantity is too low from society's point of view.
Firms in which type of market make zero economic profit in the long run?
A) perfect competition and monopolistic competition B) monopoly C) perfect competition D) monopolistic competition
In a competitive labor market, what is the profit-maximizing number of workers that a firm will hire?
What will be an ideal response?