Which of the following occurs if government intervention forces the economy inside the production possibilities curve?
A. Market failure.
B. Government failure.
C. Income inequality.
D. Externalities.
Answer: B
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When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
Which of the following statements regarding a firm's long-run average total cost (LRATC) curve and its short-run average total cost (SRATC) curve is true?
A) The LRATC shows the lowest cost at which a firm is able to produce a given level of output when no inputs are fixed. B) The contribution of average fixed cost to LRATC is greater than its contribution to SRATC. C) The shape of the LRATC is affected by the law of diminishing returns. D) The SRATC, but not the LRATC, can be used by a firm's managers for planning.
In the simultaneous move labor negotiation game:
a. The payoffs are always higher if you accommodate b. The payoffs are always higher if you bargain hard c. The payoffs from accommodating are only higher if your opponent bargains hard d. The payoffs from accommodating are only higher if your opponent accommodates
Which of the following is not inversely related to per capita income?
A. Mortality rates for children under five years of age. B. Adult illiteracy rates. C. Per capita energy consumption. D. Population growth rates.