In the AD/AS diagram, _____________ unemployment is shown by how close the economy is to the potential or full employment level of GDP.
a. frictional
b. structural
c. cyclical
d. natural
c. cyclical
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Jodie has indifference curves for CDs and colas, with CDs on the vertical axis. The flatter her indifference curves are, the
A) smaller her average rate of substitution. B) larger her average rate of substitution. C) smaller her marginal rate of substitution. D) larger her marginal rate of substitution.
When the consumption of a good creates an external benefit,
A) the marginal social cost curve lies below the marginal private cost curve. B) the marginal social benefit curve lies above the marginal private benefit curve. C) the quantity produced in an unregulated, competitive market is greater than the efficient quantity. D) None of the above answers is correct.
Suppose that 75 percent of a cigarette tax is borne by consumers. If the supply elasticity is 1, the demand elasticity is equal to:
A. 1/2. B. 1. C. 1/3. D. 1/4.
If the Fed begins an expansionary policy, which of the following examples would counteract that policy?
a. European banks significantly reduce the number of loans they issue. b. A bank in Milwaukee increases the number of loans it issues. c. An Brazilian insurance company maintains the same loan policy. d. A bank in Jacksonville increases the number of borrowers by 5 percent.