Figure 10-5
Figure 10-5 shows supply and demand conditions in a perfectly competitive industry and for a firm in that industry. At point C, the firm would
a.
earn zero economic profit.
b.
earn negative economic profit.
c.
have a zero opportunity cost of capital.
d.
have a negative opportunity cost of capital.
b
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Over the past year, productivity grew 1.8%, capital grew 2%, and labor grew 1%. If the elasticities of output with respect to capital and labor are 0.2 and 0.8, respectively, how much did output grow?
A) 1% B) 2% C) 3% D) 4%
Briefly compare the three tax systems based on the relationship between the marginal tax rate and the average tax rate as income rises
What will be an ideal response?
Other things constant, an increase in resource prices will
a. increase aggregate demand. b. decrease aggregate demand. c. decrease short-run aggregate supply. d. increase short-run aggregate supply.
According to the Keynesian view of macroeconomics, what should be the role of the government as far as economic policy?
Select one: a. The government should keep the growth rate of the money supply stable. b. The government should maintain a fixed interest rate. c. The government should try to raise the AS curve. d. The government should try to stabilize the AD curve.