If Tony receives a pay raise and the price effect outweighs the income effect on his labor supply decisions, he will:
A. work more hours.
B. quit and not work at all.
C. work less hours.
D. work the same hours no matter what.
Answer: A
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Which concept springs to mind when thinking of the classical model?
a. Inflation. b. Population growth. c. Markets clear. d. The microeconomy. e. Money supply.
In the long run the monopolistic competitor will be _____________.
A. making a profit B. taking a loss C. breaking even D. None of the choices are correct.
A negative externality exists when the actions of one party impose costs on a second party.
Answer the following statement true (T) or false (F)
Suppose the economy is at a short-run equilibrium GDP that lies above potential GDP. Which of the following will occur because of the automatic mechanism adjusting the economy back to potential GDP?
A) Output will increase. B) Short-run aggregate supply will shift to the left. C) Unemployment will decline. D) Prices will decline.