List and explain the two phases and two turning points of the business cycle
What will be an ideal response?
The economy is defined as being an expansion when real GDP is increasing and in a recession when real GDP decreases for at least two consecutive quarters. Between expansion and recession the economy reaches a peak defined as a local maximum in the level of real GDP. A trough is the opposite of a peak where real GDP hits a local minimum as the economy goes from being in a recession to being in an expansion.
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Deterring entry might require a firm to
A) price their product closer to the competitive price than to the monopoly price. B) price their product closer to the monopoly price than to the competitive price. C) drop output almost to zero to show the consumers "who's boss." D) drop price almost to zero to get price below marginal cost.
Opportunity cost refers to:
A. the amount of dollars that have to be spent in order to employ a resource. B. the cost of employing one more unit of a resource. C. a cost that a decision maker has already incurred. D. the cost associated with foregoing the opportunity to employ a resource in its best alternative use.
The silverware industry has been in serious decline since the 1980s. Family dining habits are less formal so people purchase less silverware. Also, in 2006-2008, the price of silver increased from $5 to $20 per ounce. Which graph in Figure 4-12 best illustrates these developments?
a.
1
b.
2
c.
3
d.
4
Figure 4-12
Data for an economy shows that the unemployment rate is 10 percent, the participation rate 80 percent, and 200 million people 16 years or older are not in the labor force. How many people are employed in this economy?
A. 800 billion B. 720 million C. 180 million D. 18 million