Why did the classical economists think that large-scale unemployment was not possible in a market economy?
What will be an ideal response?
The classical economists accepted Say's law, which indicated that desired expenditures will equal actual expenditures. The act of producing indicates one wants to buy other goods. A surplus or shortage in one market would soon be corrected because prices and wages were assumed to be flexible, and they assumed people could not be fooled by money illusion. They also assumed pure competition and that people were motivated by self-interest. Combining all these ideas, they concluded that full employment would be the norm.
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The slope of a steep upward-sloping line is a smaller value than the slope of a nearly flat upward-sloping line
a. True b. False
Which of the following would not be considered "capital" in economics? a. A delivery van used by Federal Express
b. $500 in currency. c. A microprocessor factory d. In economics, both (a) and (c) are considered capital.
The model of supply and demand is very good at predicting ______.
a. government policies for large and small markets b. government policies for just large markets c. changes in prices in large and small markets d. changes in quantities in large markets but not small ones
Refer to the data provided in Table 9.3 below to answer the following question(s). Table 9.3qTFCTVCTCMCAVCATC0$100 $0$100 ---- -- 1100401404040 140 21006016020 30 80 31009019030 30 63.334100124 224 343156 5100180 280 56 36 56 6100 264 364 84 44 60.677100 372 472 108 53.14 67.43Refer to Table 9.3. If the market price is $84, then this firm will maximize profits by producing ________ unit(s) of output and its profits will be ________.
A. seven; $116 B. five; $140 C. six; $140 D. six; $240