If the natural unemployment rate decreases, then the short-run Phillips curve ________ and the long-run Phillips curve ________
A) does not shift; shifts leftward
B) shifts leftward; shifts leftward
C) shifts rightward; shifts rightward
D) shifts leftward; does not shift
E) shifts rightward; shifts leftward
B
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The above figure shows a perfectly competitive firm. If the market price is $15, the firm
A) is incurring an economic loss. B) is making an economic profit. C) is making zero economic profit. D) will immediately shut down. E) might shut down but more information is needed about the AVC.
If the marginal tax rate rises above t * = 63%, tax revenue will decrease because
A) workers refuse to pay taxes since the tax rate is too high. B) workers are in the downward-sloping portion of labor supply. C) workers reduce working hours in response to the wage loss. D) None of the above.
When a new product is introduced in the market, Lenny always wants to see how popular the item becomes before he purchases it. Lenny's behavior is known as
A) overt collusion. B) limit-pricing. C) a network effect. D) price leadership.
Classical economists believed that production could be stuck below its full employment level for a long period of time
a. True b. False