Which of the following is not true of a recession?
a. The economy is overheated.
b. Cyclical unemployment is high.
c. Unemployment is caused by insufficient spending.
d. If the economy is in equilibrium, the aggregate expenditure line is too low to create an intersection at the full-employment level.
e. If employers hired more workers to reduce unemployment, they would be unable to sell all the extra output those workers would produce.
A
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Answer the following statement(s) true (T) or false (F)
1. Cost-effectiveness requires that resources are allocated such that the additional benefits to society are equal to the additional costs. 2. Assume that the marginal revenue associated with the 12th unit of output is $25 and the marginal cost is $14. As a result, the firm should produce more, because the marginal profit at that output level is greater than zero. 3. When a profit-maximizing firm increases output to Q = 50, its MR= $100 and MC = $124, meaning that total profitfalls by $24, so the firm should contract production. 4. In perfect competition, the firm faces a perfectly inelastic demand. 5. The demand faced by the perfectly competitive firm is perfectly elastic, meaning that price and marginal revenue are equal.
A voting procedure in which voters initially rank alternatives, the alternative with the fewest first-place votes is eliminated and those votes are transferred to each voter's next-favorite choice,
and the process repeats until a winner emerges, is known as the A) Borda-count method. B) Condorcet method. C) instant runoff method. D) plurality-rule method
When there are credit-market imperfections, an increase in government debt may be advantageous because it
A) discourages credit-constrained consumers from borrowing too much. B) allows credit-constrained consumers to consume more. C) eliminates the problems that cause credit-market imperfections. D) encourages more private saving.
Patrick consumes only two goods: Celtic Music concerts and Celtic Springs Water. Patrick earns $100 per month at his part-time job in the library. The price of Celtic concerts is $10. The price of Celtic Springs Water is $2. Patrick currently goes to 5 Celtic concerts and consumes 25 bottles of Celtic Spring Water in a month.(a) Draw Patrick's budget constraint and optimal consumption bundle such that Celtic concerts are measured on the horizontal axis.(b) In April, Patrick receives a 5 percent pay increase. Inflation raises the price of concerts to $10.50 and the price of Celtic Springs Water to $2.10. Draw Patrick's new budget constraint and optimal consumption bundle, considering that the number of Celtic concerts is measured along the horizontal axis. How many Celtic concerts does he
attend in April? How many bottles of water does he drink in April? What will be an ideal response?