The law of increasing opportunity cost says that
a. wages increase as employment increases
b. interest rates rise as inflation increases
c. the cost of increasing employment opportunities increases with specialization
d. the more of something we produce, the less expensive it becomes
e. the more of something we produce, the greater is the opportunity cost of producing an additional unit
E
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Using the textbook's production function, if two percent more labor working with two percent more capital produces two percent more real GDP, then "multifactor productivity" has
A) risen by four percent. B) risen by two percent. C) remained unchanged. D) fallen by one percent. E) fallen by two percent.
The "natural" rate of unemployment is the unemployment rate toward which the economy gravitates in the
a. short run, and the natural rate is constant over time. b. long run, and the natural rate is constant over time. c. short run, and the natural rate changes over time. d. long run, and the natural rate changes over time.
An import quota does which of the following?
A. Decreases the price of the imported good to the consumer. B. Increases the price of the domestic good to the consumer. C. Redistributes income from the domestic producer to the protected domestic exporter. D. Decreases the price received by the foreign producer.
An expansion is:
A. the high point of economic activity prior to a downturn. B. the low point of economic activity prior to a recovery. C. a period in which the economy is growing at a rate significantly below normal. D. a period in which the economy is growing at a rate significantly above normal.