In the classical model, an increase in the unemployment rate
A) will result in an increase in the price level if the reduction in output is caused by a change in aggregate demand.
B) will likely be temporary.
C) is a signal of demand-pull inflation.
D) will persist when the reduction in output is caused by a reduction in aggregate demand.
B
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Harry owns a barber shop and charges $6 per haircut. By hiring one barber at $10 per hour, the shop can provide 24 haircuts per 8-hour day. By hiring a second barber at the same wage rate, the shop can now provide a total of 42 haircuts per day. The MRP of the second barber is
A. 18 haircuts. B. 42 haircuts. C. $126. D. $108.
When graphing a demand curve for corn, we are showing the relationship between the quantity demanded of corn and the
A) money price of corn. B) relative price of corn. C) income effect. D) substitution effect.
An example of an externality occurs when a chemical factory
A) is producing ethanol and dumps waste in a river upstream from a popular fishing spot. B) produces fertilizers that do not help plants grow. C) produces fertilizers that kill plants rather than feed them. D) overworks its employees.
The choice between futures and options
A) depends on whether the underlying instrument is a debt instrument or an equity. B) reflects a trade-off between the higher cost of using options and the extra insurance benefits that options provide. C) reflects a trade-off between the higher cost of using futures and the extra insurance benefits that futures provide. D) reflects a trade-off between the greater risk from using options and the extra insurance benefits that options provide.