When an economy is at its natural rate of unemployment, which of the following will be true?
A) Only structural unemployment as a result of technological change will exist in the economy.
B) The labor force participation rate will be 100%.
C) The unemployment rate will be greater than 0%.
D) The unemployment rate will be 0%.
C
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Having a comparative advantage means a nation can
A) benefit from trade. B) produce at a higher opportunity cost. C) produce more of the good. D) produce without incurring an opportunity cost. E) produce the good at a point beyond its PPF.
Peter's Pencils is a perfectly competitive company producing pencils. Suppose Peter is producing 1,000 pencils an hour. If the total cost of 1,000 pencils is $500, the market price per pencil is $2, and the marginal cost is $2, then Peter
A) makes an economic profit because marginal revenue is equal to marginal cost at this output level. B) should decrease his output to increase his profit. C) is maximizing his profit and is making an economic profit. D) should increase his output to increase his profit. E) is not maximizing his profit but is making zero economic profit anyway.
If the demand for fast-food rises as a result of lower income, we would say fast-food is an inferior good
a. True b. False Indicate whether the statement is true or false
The owner of Tie-Dyed T-shirts, a perfectly competitive firm, hires you to give him economic advice. He tells you that the market price for his shirts is $15 and that he is currently producing 200 shirts at an AVC of $10 and an ATC of $20. You tell him he should continue to operate in the short run because
A. he is earning an economic profit of $4,000. B. In fact you do not tell him to operate-he should shut down since he has a loss. C. his loss from operating in only $2,000 which is less than his loss if he shuts down. D. he has to pay this fixed costs of $2,000 if he shuts down which is greater than his loss when he operates.