The changing age structure of the U.S. population and more efficient labor markets are both possible explanations for:
A. the 2001 recession.
B. the increase in the cyclical rate of unemployment.
C. the stagnation of real wages.
D. the decline in the natural rate of unemployment.
Answer: D
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In monopolistic competition, free entry and free exit mean that in the long run firms in the industry make zero economic profit
Indicate whether the statement is true or false
If only one firm in an industry could take advantage of a reduced wage and all other firms continue paying the old wage, how would one best describe the one firm's reaction to this reduced wage assuming labor is the only variable input? The
marginal revenue product of labor curve A) would remain unchanged, and the firm would hire more labor at the lower wage. B) shifts to the left, and the firm hires more labor at the lower wage on the new curve. C) shifts to the right, and the firm hires more labor at the lower wage on the new curve. D) shifts to the left, and the firm hires less labor at the lower wage on the new curve. E) shifts to the right, and the firm hires less labor at the lower wage on the new curve.
The severe oil shortages of the 1970s in the US created:
A. cost push inflation. B. demand pull inflation. C. a recession. D. an increase in the velocity of money.
What matters most in determining efficient distribution of production over the world is
a. absolute advantage. b. efficiency. c. the stock of resources. d. comparative advantage.