Which of the following is a macroeconomic question?
a. What is a firm's profit-maximizing level of output?
b. How will economic growth affect unemployment?
c. How will a consumer maximize his utility?
d. How will a monopolist maximize his profit?
b
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Whenever indifference curves have kinks, marginal willingness to pay curves have horizontal "flat spots".
Answer the following statement true (T) or false (F)
The owner of a garage makes large contributions to a politician who is seeking the office of state governor. If his candidate wins, he will get the contract, which now resides with a competitor, to repair State Police vehicles. This is an example of
A. moral hazard. B. externality. C. rent seeking. D. investment.
A perfectly competitive firm discovers that its MRPL divided by the wage equals 1.25. The firm should
A) check the MRP of the other inputs and divide them by their prices. If they are all equal to 1.25 it is maximizing profits. B) hire more labor. C) purchase more capital. D) try to pay a lower wage rate.
Banks create money in the economy by:
A. charging higher interest on savings than loans. B. charging higher interest on loans than savings. C. loaning out all of their deposits to borrowers. D. loaning out part of each deposit, which will be redeposited by someone else.