Suppose real GDP is $12.1 trillion and potential GDP is $12.6 trillion. To move the economy back to potential GDP, Congress should
A) lower government purchases by $500 billion.
B) raise government purchases by $500 billion.
C) raise government purchases by more than $500 billion.
D) lower taxes by an amount less than $500 billion.
E) lower taxes by $500 billion.
D
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A monopolistically competitive firm is producing an output level at which marginal revenue is less than marginal cost. This firm should __________ quantity and __________ price to increase profit or reduce losses
a. increase, increase b. increase; decrease c. decrease; increase d. decrease; decrease e. increase; not change
Opportunity cost is the best alternative sacrificed for a chosen alternative
a. True b. False Indicate whether the statement is true or false
An industry with only three large equally-sized firms would have the same four firm concentration ratio but a higher Herfindahl-Hirshman Index compared to an industry with only four equally sized firms
a. True b. False Indicate whether the statement is true or false
Which of the following is NOT true about the theory of the dual labor market?
A. It is a class theory of employment. B. The dividing line between the primary and secondary markets is whether you have a college degree. C. Jobs in the secondary market pay better than those in the primary market. D. This theory does not take into account the huge middle level of occupations—nursing, social work, and non-college-graduate positions in insurance, banking, and retailing.