You have noticed that there is a persistent shortage of teachers in an inner-city school district in your state. Based on this observation, you suspect that:
A. there is an excess supply of teachers in other districts.
B. the wage for teachers in that district is higher than the wage in other districts.
C. the wage for teachers in that district is lower than the equilibrium wage.
D. the demand for teachers in the inner-city school district is too low.
Answer: C
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If the nominal interest rate in an economy is 4% and the real interest rate in the economy is 2%, the rate of inflation in the economy must be:
A) -2%. B) 4%. C) 2%. D) 0.5%.
Those who favor an active approach to policy and those who favor a passive approach disagree not only on how quickly the government can act but also on how stable the economy basically is
a. True b. False Indicate whether the statement is true or false
The difficulty in analyzing oligopolistic behavior arises from the
a. degree of government regulation of the market structure. b. interdependent nature of oligopolistic decisions. c. large number of firms in the industry. d. market power of consumers.
Figure 7-11
Figure 7-11 shows an average cost curve with points on it that correspond to three quantity levels. Which of the following statements must be wrong?
a.
The firm's technology may show increasing marginal returns as production increases from A to B.
b.
The firm may have positive fixed costs.
c.
As production expands from A to B to C, the firm may become increasingly difficult to manage efficiently.
d.
The firm's average fixed cost may rise as production increases from B to C.