If a perfectly competitive industry is in long-run equilibrium, the price of the product equals the minimum of:
A. marginal cost.
B. fixed cost.
C. average variable cost.
D. average total cost.
Answer: D
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Li works for a wage of $9 per hour. He has 50 hours to devote to work or leisure. If his wage rises to $11 per hour, _____
a. he will spend more time working because his opportunity cost of leisure will rise b. he will spend less time working because his opportunity cost of leisure will rise c. he will spend less time working because his opportunity cost of leisure will fall d. he will spend more time working because his opportunity cost of labor will rise
If the political leaders of a country want to promote economic growth, which of the following policy alternatives would be most effective?
a. imposition of price controls on agricultural products in an effort to keep food cheap b. a public-sector investment program financed by highly progressive taxation c. low taxes, a monetary policy consistent with long-run price stability, and the abolition of price controls and trade restrictions d. expansionary monetary policy designed to keep interest rates low
The slope of the consumption function relates changes in consumer spending to changes in disposable income received by consumers. This is called:
a. the marginal propensity to consume. b. the average propensity to consume. c. the utility-maximization function. d. the marginal rate of transformation.
A comparison of the average growth rates across time for developed nations indicates that:
A. nations with lower levels of income grow more slowly than those with higher levels of income. B. nations with lower levels of income will never be as rich as nations with high levels of income. C. nations with high levels of income experience a continuously increasing growth rate. D. nations with lower levels of income grow more quickly than those with higher levels of income.