Which is not a property of an optimal efficiency wage?
A. Any structural unemployment that results from an efficiency wage is efficient for the economy as it helps sort nonshirkers and shirkers into good and bad jobs, respectively.
B. There is involuntary unemployment.
C. The efficiency wage is higher than the competitive wage.
D. Employment will be less with an efficiency wage than with a competitive wage.
E. Employed workers will not shirk on the job.
Answer: A
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If a surplus exists in the market for swimwear, an economist would predict that
a. the price of swimwear will rise b. producers will increase the production of swimwear c. the supply of swimwear will increase d. the price of swimwear at retail outlets will begin to fall e. buyers will react to the surplus by increasing their demand for swimwear
On the short-run Phillips curve, the expectations of inflation:
A. remain constant. B. are rising or falling depending on how the economy is performing. C. are falling. D. are rising.
Using the concept of the budget constraint and indifference curves, explain how a consumer maximizes total utility.
What will be an ideal response?
Automatic stabilizers have the effect of
A. increasing aggregate demand during a recessionary gap. B. increasing long-run aggregate supply during a recessionary gap. C. increasing aggregate demand during an inflationary gap. D. increasing long-run aggregate supply during an inflationary gap.