Explain the relationship(s) between full employment, cyclical unemployment, the natural unemployment rate, and potential GDP
What will be an ideal response?
The economy is at full employment when there is no cyclical unemployment. The unemployment rate at full employment is called the natural unemployment rate. Because there is no cyclical unemployment, the natural unemployment rate is comprised of only frictional and structural unemployment. The level of output that the economy would produce if it was at full employment is called potential GDP.
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Suppose you decide to attend summer school and that this is considered a rational choice. When making this choice,
A) you considered the marginal cost and marginal benefit of your choice. B) you must ignore the problem of scarcity. C) you must have considered the social interest. D) you have made a positive statement. E) you have used the ceteris paribus assumption.
Among the state nonmember banks, __________ have federal deposit insurance through the FDIC
A) all B) virtually all C) a minority D) none of them
The above figure shows supply and demand curves for milk. If the government passes a $2 per gallon specific tax, the loss in social welfare will equal
A) b + c + f + g. B) f + g. C) b + f. D) c + g.
Suppose that a monopolist must choose between two points on its demand curve: it can sell 100 units for $3 each, or it can sell 150 units for $2 each. Which of the following is true?
a. The monopolist is facing elastic demand. b. The monopolist is facing unit elastic demand. c. The monopolist is facing inelastic demand. d. The monopolist is facing perfectly elastic demand. e. The elasticity of demand cannot be determined with the information given.