If cost-push inflation occurs and the government adopts a "hands-off" policy approach, then according to the simple extended AD-AS model, in the long run the economy will:
A. Get back to where it started from
B. Get stuck with high unemployment
C. Experience an inflationary spiral
D. Have a higher price level
A. Get back to where it started from
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A monopolistic competitor shuts down production in the short run if ________
A) marginal revenue equals marginal cost B) marginal cost equals average cost C) total revenues do not cover variable costs D) total revenues do not cover fixed costs
With the exception of during recessions, workers in Canada are eligible for unemployment benefits for about twice as long a period of time as workers in the United States. As a result
A) the unemployment rate in Canada is usually higher than in the United States. B) the opportunity cost of job search in Canada is lower than in the United States. C) frictional unemployment is higher, on average, in the United States than in Canada. D) the average duration of unemployment is longer in the United States than in Canada.
The following table shows the relationship between the speed of a computer's CPU and its benefits and costs. Assume that all other features of the computer are the same (that is, CPU speed is the only source of variation), and only the CPU speeds listed below are available for purchase.CPUGHzTotal BenefitMarginal BenefitTotal CostsMarginal Costs2.0$1,000 $900 2.5$1,400 &1003.0 $300$1,200 3.5$1,900 &1,500 4.0$2,000 &400Choosing a 3.5GHz computer would be irrational because:
A. it is impossible to tell the difference compared to a 3.0GHz computer. B. its marginal benefit is less than its marginal cost. C. its marginal benefit is equal to its marginal cost. D. its marginal benefit is greater than its marginal cost.
Related to the Economics in Practice on page 704: Of the children under 5 years of age in the world who are characterized as extremely short due to malnutrition, one half are in
A. Asia. B. Africa. C. South America. D. Eastern Europe.