Is a firm technologically efficient if it uses the latest technology? Why or why not?
What will be an ideal response?
Technological efficiency occurs when a firm produces a given level of output using the least amount of inputs. Adopting the latest available technology does not necessarily imply that a firm's production process is technologically efficient. As long as the firm is getting the maximum possible output for a given combination of inputs, it is technologically efficient.
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Unemployment insurance
a. reduces search effort which raises unemployment. b. reduces search effort which lowers unemployment. c. increases search effort which raises unemployment. d. increases search effort which decreases unemployment.
An instance in US history when SRAS increased was
a. The Great Depression (1930s) b. WWII (early 40s) c. OPEC (70s) d. Tech Boom (90s)
Suppose you and a classmate decide to split up tasks for a group project. In two hours you can write 6 pages of a paper or create 24 presentation slides. In the same two hours your classmate can write 4 pages of a paper or create 20 slides. Your work is of equal quality. Do you have an absolute advantage in production for this project?
What will be an ideal response?
The price-misperceptions model differs from the equilibrium business cycle model in that households
a. no longer serve as providers of capital services. b. find that market-clearing prices move to equilibrium slowly. c. sometimes misinterpret changes in nominal prices as changes in real prices. d. typically face disequilibrium because prices fail to clear markets.