When the economy swings back toward the boom part of a business cycle which of the following will generally not occur?
A. Cyclical unemployment will decrease.
B. Actual wages will approach the market-clearing level.
C. Labor demand will increase.
D. Labor supply will decrease.
Answer: D
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The curvature of the production function shows that as employment increases, the productivity of labor
A) remains positive and increases. B) remains positive but decreases. C) decreases and becomes negative. D) remains constant.
According to the efficient markets hypothesis, the current price of a financial security
A) is the discounted net present value of future interest payments. B) is determined by the lowest successful bidder. C) fully reflects all available relevant information. D) is a result of none of the above.
Employers verify the facts of potential employees' resumes to avoid
A) signaling. B) screening. C) cheap talk. D) moral hazard.
What is the effect of a decrease in the price of potato chips on the market for pretzels?
a. Both equilibrium price and equilibrium quantity rise. b. Both equilibrium price and equilibrium quantity fall. c. Equilibrium price rises and equilibrium quantity falls. d. Equilibrium price falls and equilibrium quantity rises. e. Equilibrium price and equilibrium quantity remain unchanged.