In Figure 45.4, when compared to the perfectly competitive equilibrium, the number of workers hired as a result of unionization 
Figure 45.4
A. increases from L' to L*.
B. remains at L'.
C. remains at L*.
D. decreases from L* to L'.
Answer: D
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The use of purchasing power parity prices
A) decreases the real GDP per person statistics published by the International Monetary Fund. B) weakens the validity of cross country comparisons of economic welfare. C) increases the amount by which U.S. GDP is larger than that of any other nation. D) accounts for differences in the prices of the same goods in different countries when measuring real GDP.
Entry by competitive firms decreases the market price, while exit by competitive firms increases the market price. Explain why firms enter or exit an industry and why these price changes occur
What will be an ideal response?
Answer the following statements true (T) or false (F)
1. A bond with no expiration date is priced at $10,000 when the interest rate in the economy is 6%. If the interest rate falls to 5.5%, then this bond's price would decrease. 2. The price of a bond with no expiration date is $1,000 and the fixed annual interest payment is $100. If the price of the bond falls to $800, the interest rate to a new buyer of the bond is now 20 percent. 3. The reserves of commercial banks are assets to commercial banks and liabilities of the Federal Reserve System. 4. The discount rate is the interest rate at which commercial banks lend to their best corporate customers. 5. The most frequently used instrument of the Federal Reserve System to control the money supply is the required reserve ratio.
A firm will shut down in the short run if
A. MR < AVC. B. MR > AVC. C. AVC < AFC. D. P > MC.