The Phillips curve implies a positive relationship between inflation and unemployment.
a. true
b. false
Ans: b. false
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Refer to Figure 15-15. Erickson Power is a natural monopoly because
A) average total cost is still declining when it intersects demand. B) of its continually declining marginal revenue curve as output rises. C) it is a power company and all power companies are natural monopolies. D) its marginal cost lies entirely below its long-run average cost.
A surplus of wheat:
a. is impossible if people are hungry. b. is impossible if the price of wheat is below equilibrium. c. will result when the quantity demanded exceeds the quantity supplied at the current price. d. is unlikely to cause any change in the price of wheat. e. indicates that the problem of scarcity of wheat has been solved.
If mutual interdependence among firms is present, each profit-maximizing firm in the market
a. produces a product that must be identical to the products of its rivals. b. must consider the reactions of its rivals when it determines its price policy. c. faces a perfectly elastic demand curve for its product. d. faces a perfectly inelastic demand curve for its product.
Which of the following statements or questions exemplify positive economics? (check all that apply)
a. The unemployment rate in Mexico is higher than in the United States. b. Should the unemployment rate in the United States be lower than in Mexico? c. When the government increases the minimum wage the unemployment rate will rise. d. The government ought to increase the minimum wage so that incomes rise. e. As the flight ticket prices fall, airlines experience a sharp increase in revenue.