From time to time, the demand for workers has risen in one region of the United States and fallen in another. This illustrates
a. frictional unemployment created by efficiency wages.
b. structural unemployment created by efficiency wages.
c. frictional unemployment created by sectoral shifts.
d. structural unemployment created by sectoral shifts.
c
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Suppose that in 2015 the chain-weighted price index for GDP in Estonia is 220 and the chain-weighted price index in Lithuania is 160. In 2016 the price index in Estonia is 242 and the price index in Lithuania is 180. You could conclude that
A) Estonia's rate of inflation is higher than Lithuania's. B) Lithuania is a more expensive place to live than Estonia. C) Estonia is a more expensive place to live than Lithuania. D) Lithuania's rate of inflation is higher than Estonia's.
Patrick lives near two gas stations, Exxon and Shell. If Exxon decreases the price of gas, we predict that the quantity of gasoline demanded at Shell will
A) decrease because Exxon and Shell gas are complements. B) decrease because Exxon and Shell gas are substitutes. C) increase because Exxon and Shell gas are substitutes. D) increase because Exxon and Shell gas are complements. E) not change Exxon and Shell are different brands of gasoline.
Which of the following statements regarding an average-cost pricing rule for a natural monopoly is WRONG?
A) It sets price equal to average total cost. B) It is efficient. C) The firm makes zero economic profit. D) More output is produced than if the firm maximized profit.
Firms in a perfectly contestable market will be forced to operate as efficiently as possible and to charge prices as low as long-run financial survival permits. Why?