Refer to the information provided in Figure 6.2 below to answer the question(s) that follow.
Figure 6.2Refer to Figure 6.2. Assume Mr. Lingle's budget constraint is AC. If the price of a gardenburger is $7.50, the price of a beer is
A. $3.75.
B. $4.00.
C. $7.50.
D. $15.00.
Answer: C
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Causation occurs when:
A) two variables tend to move in opposite directions. B) change in one variable is the reason for the change in another variable. C) two variables tend to move in the same direction. D) change in one variable does not cause any change in another variable.
Unemployment that results from business recessions that occur when aggregate demand is insufficient to create full employment is
A) frictional unemployment. B) structural unemployment. C) cyclical unemployment. D) seasonal unemployment.
From these figures we can conclude that
A. China has a comparative advantage in rice.
B. China has a comparative advantage in radios.
C. the United States has a comparative advantage in radios.
D. neither has a comparative advantage in these two goods.
When the economy is at its potential output:
A. there is no structural unemployment. B. there is no unemployment. C. there is no frictional unemployment. D. the labor force is fully employed.