Consider a broom factory that permanently closes because of foreign competition. If the broom factory's workers cannot find new jobs because their skills are no longer marketable, then they are classified as:
a. seasonally unemployed.
b. cyclically unemployed.
c. frictionally unemployed.
d. structurally unemployed.
d
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A price support leads to inefficiency because
A) output is more than the efficient, equilibrium quantity. B) the marginal benefit of the last unit produced is larger than the marginal cost. C) the price charged is less than the equilibrium price. D) producer surplus is less than consumer surplus. E) producers must pay a subsidy to the government.
A good is nonexcludable if:
A. there is no way to prevent a person from consuming or using it. B. more than one person can consume it at the same time without affecting its value to others. C. consumption of it involves perfect rivalry. D. consumption is completely excludable.
Which of the following is not a weakness of fiscal policy? a. Implementation of policy is difficult
b. Time lags in fiscal policy are long and variable. c. Fiscal policy works only during periods of stagflation. d. Fiscal policy often affects only current income, but many economic decisions are made on the basis of permanent income. e. Fiscal policy might have undesirable long-term effects on short-run aggregate supply.
Which of the following statements about a monopolistically competitive firm, in the short run, is true?
a. Profits will be maximized at the point at which price equals marginal cost and hence there is no deadweight loss. b. The firms earn zero economic profit in the short run. c. The firms achieve allocative and productive efficiency in the short run. d. Advertising may enable a firm to charge a higher price than that charged by rival firms. e. It faces a perfectly elastic demand curve.