Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4Refer to Figure 2.4. The economy moves from Point E to Point B. This could be explained by
A. a change in society's preferences for hybrid cars versus motorcycles.
B. an increase in economic growth.
C. an increase in unemployment.
D. a reduction in unemployment.
Answer: A
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Suppose the Okun's law coefficient is 2, the full-employment level of output is $5000 billion, and the natural rate of unemployment is 6%
(a) What is the current level of output if the current unemployment rate is 8%? (b) Suppose the unemployment rate falls to 5%; what is the current level of output? (c) Suppose structural changes in the economy raise the natural rate of unemployment to 7%, and lower the full-employment level of output to $4800 billion. If the current unemployment rate is 8%, what is the current level of output?
A flour mill holding exclusive contracts to 95% of the wheat in a large geographic area may operate as a flour producing monopoly locally because
A) the mill has a very inelastic supply curve. B) the mill is a natural monopoly. C) the mill controls a key input. D) the government will declare it a monopoly.
The price elasticity of demand for Rosie's Roses fresh flowers the week of Valentine's Day is 1.10 and is 1.60 other days of the year. If Rosie's Roses faces a constant marginal cost of $0.75 per rose, what is the profit-maximizing off-peak load price to charge on days not on the week of Valentine's Day?
A) $2.00 B) $5.00 C) $8.50 D) $1.25
The level of an economic activity should be increased to the point where the ____ is zero
a. marginal cost b. average cost c. net marginal cost d. net marginal benefit e. none of the above