Economists who believe there is a short-run trade-off between inflation and unemployment attribute it to the ______.
a. complete flexibility of prices
b. complete flexibility of wages
c. slow adjustment of input prices
d. fast adjustment of input prices
c. slow adjustment of input prices
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What is the return on a 5 percent coupon bond that initially sells for $1,000 and sells for $1,200 next year?
A) 5 percent B) 10 percent C) -5 percent D) 25 percent
Which of the following offers the fullest explanation of why "price equals marginal cost" is the rule from marginal analysis that indicates the profit-maximizing output level?
a. If output were reduced from the profit-maximizing level, then the firm would be giving up marginal revenue that exceeds marginal cost, and thus reducing the level of profit. b. If output were increased from the profit-maximizing level, then the firm would be gaining marginal revenue that is less than the marginal cost incurred in producing this additional unit, and thus reducing the level of profit. c. Because the firm colludes with other similar firms to set price equal to marginal cost. d. Both a. and b. above are correct.
Government policies can change the costs and benefits that people face. Those policies have the potential to
a. alter people's behavior. b. alter people's decisions at the margin. c. produce results that policymakers did not intend. d. All of the above are correct.
An economic explanation as to why individuals such as Bill Gates and LeBron James don't finish college is that:
A. the sunk cost of college is very high for them. B. the opportunity cost of college is very high for them. C. the benefits of additional college exceed the costs of additional college for them. D. the decision not to finish college is irrational.