In an economy of 100 people in the labor force, if 10 people are unemployed for 4 weeks during the year, and 30 people are unemployed for 8 weeks during the year, and the rest are employed continuously throughout the year, then the average duration of unemployment in this economy is:
A. 7 weeks.
B. 5 weeks.
C. 8 weeks.
D. 6 weeks.
Answer: A
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If the net benefit of Project A is $5 and that of Project B is $8, switching from Project A to Project B:
A) reduces the net benefit by $3. B) increases the net benefit by $3. C) increases the net benefit by $8. D) decreases the net benefit by $8.
A profit-maximizing firm will never hire that quantity of a factor of production for which that factor has an increasing marginal productivity because
a. it would not be maximizing output. b. it would not be maximizing the productivity of labor. c. it would not be minimizing costs. d. it would not be maximizing profits.
The short-run Phillips curve shifts from SRPC0 to SRPC1 as a result of
A) a fall in the expected inflation rate. B) an increase in the natural unemployment rate. C) a rise in the expected inflation rate. D) a decrease in the natural unemployment rate. E) None of the above answers is correct.
Suppose Mexico and the United States are on the gold standard. If there is a half an ounce of gold in the dollar, and one quarter an ounce of gold in the peso, then the exchange rate is
A) $0.50 = 1/2 peso. B) $1 = 1/4 peso. C) $1 = 2 pesos. D) $1 = 4 pesos. E) $1 = 1/2 peso.