The peak phase of the business cycle represents
A) a temporary maximum output level of Gross Domestic Product (GDP).
B) an increase in foreign investment.
C) a labor surplus.
D) falling prices.
A
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If both the goods and the labor market are perfectly competitive, a firm that hires labor up to a point where the value of marginal product of labor equals the wage rate also produces at a point where price is:
A) equal to average cost. B) equal to marginal cost. C) less than marginal cost. D) higher than marginal cost.
Assume a company is at a point in production where marginal product is above average product. Which of the following must be true?
A. Diminishing marginal product must not have set in yet. B. Marginal product must be rising. C. Average product must be rising. D. All of these are true.
A perfectly elastic supply curve would:
A. be horizontal. B. be vertical. C. intersect the horizontal axis. D. intersect the two axes at the origin.
Vertical differentiation makes products better for some consumers and worse for others.
Answer the following statement true (T) or false (F)