An example of positive analysis is studying
a. how market forces produce equilibrium.
b. whether equilibrium outcomes are fair.
c. whether equilibrium outcomes are socially desirable.
d. if income distributions are fair.
a
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The towns of Mattoon and Charleston can produce one of two goods: books and bagels. In Charleston factories, 6 laborers can produce 100 books in an hour, while 12 laborers can produce 400 bagels in an hour.
(i) What is the cost of producing books in Charleston? (ii) Suppose the cost of producing books in Mattoon is 3 bagels per book. Which town should specialize in bagel production and which town should specialize in book production?
The government expenditure multiplier and the tax multiplier are
A) different in size and the tax multiplier is larger. B) not comparable because the government expenditure multiplier applies to aggregate supply and the tax multiplier applies to aggregate demand. C) different in size and the government expenditure multiplier is larger. D) identical in size. E) not comparable because the government expenditure multiplier applies to aggregate demand and the tax multiplier applies to aggregate supply.
If in some year real GDP was $5 trillion and the GDP deflator was 200, what was nominal GDP?
a. $2.5 trillion. b. $10 trillion. c. $40 trillion. d. $100 trillion.
In the long run:
A. all costs are variable costs. B. all costs are fixed costs. C. variable costs equal fixed costs. D. fixed costs are greater than variable costs.