Why does unemployment tend to change when the level of output changes?
a. Persons wish to buy things, and if output falls, people need to work less to earn the income to buy the smaller output.
b. Labor is an input, and if output falls, employers need fewer workers to make it, so the employment falls.
c. When output rises, persons are more interested in buying, and will work more to earn the income to buy things.
d. Persons face the option of buying or working, so that when they do more of one, the other necessarily falls.
e. When companies replace workers with machines, output rises, and people take time off from work to buy before returning to employment.
b
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The term "value added" is used to describe:
a. the increase in the value of a product that occurs at each stage of production. b. the amount subtracted from the value of goods because of inflation. c. the total value of all intermediate goods used in the production of the final good. d. the amount paid in the final sale of a product or service. e. the amount subtracted from the value of resources because of depreciation.
Which of the following statements is true?
a. Goods are scarcer than services in an economy. b. Goods are scarce for neither the poor nor the rich. c. Goods are scarce for both the poor and the rich. d. Goods are scarce for the poor but not for the rich. e. Goods are scarce for the rich but not for the poor.
Explain briefly the following concepts:
(a) Increasing returns to scale. (b) Decreasing returns to scale. (c) Constant returns to scale
If consumption of education creates an external benefit, then in order to increase efficiency relative to the outcome determined by private decisions,
a. more education must be produced. b. the same amount of education must be produced, and the price should be lower. c. less education must be produced, and the price should be higher. d. less education must be produced, and the price should be lower. e. less education must be produced at the same price.