Economists regard people who work below their potential as being
a. underemployed
b. unemployed
c. as economically efficient as possible
d. without human capital
e. employed, but a contributor to long-run unemployment
A
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You work as a forecaster for a luxury automobile manufacturer. You know that there is a strong positive relationship between the demand for luxury automobiles and income levels. The government issues a report predicting that it expects income levels to increase steadily over the next 5 years. All else equal, which of the following courses of action would you recommend to the firm?
A. Start to increase investment now so that when income levels increases and the demand for luxury automobiles increases, the firm will be able to meet the new demand. B. Don't change the amount of investment made, but raise the price of luxury automobiles in response to the expected increase in the demand. C. Suggest that the firm curtail its advertising to avert a substantial increase in demand for luxury automobiles. D. Suggest that the firm make an investment in new capital to produce luxury automobiles only after it can verify an increase in income levels.
A caption that can serve as a retort to opponents of social regulation would be:
A. "There is no free lunch" B. "You can't push on a string" C. "Less government is not always better" D. "Restraints of trade must be outlawed"
The process of price cap regulation includes which of the following?
i. a price ceiling ii. marginal cost pricing iii. average cost pricing A) i only B) ii only C) i and ii D) ii and iii E) i and iii
If a typical monopolistically competitive firm is making short-run losses, then
A) as some firms leave, the demand for the products of the remaining firms will become more elastic. B) other more competitive firms will enter the market. C) as some firms leave, the remaining firms will experience an increase in the demand for their products. D) the industry will eventually cease to exist.