If the natural unemployment rate is 5 percent and the actual unemployment is 3 percent, then Okun's Law concludes that real GDP is
A) 2 percent greater than potential GDP.
B) 4 percent less than potential GDP.
C) 3 percent greater than potential GDP.
D) 4 percent greater than potential GDP.
E) 2 percent less than potential GDP.
D
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Which of the following is likely to shift the labor supply curve to the left, assuming all else equal?
A) A rise in the wage rate B) A social change that discourages women to participate in the labor force C) A fall in the wage rate D) Decrease in the maximum amount of unemployment benefits
Discuss how taxes affect product and input markets
What will be an ideal response?
When a Pigouvian subsidy is imposed on a market with a positive externality efficiency:
A. is not affected. B. decreases. C. increases. D. drops to zero.
As long as price exceeds AVC, the firm is better off
A. raising its price. B. closing. C. cutting price. D. continuing production.