If a $10 trillion economy is growing at a real rate of 2.5 percent a year, what must this economy do to maintain a constant debt-to-GDP ratio?
A. Have increasingly smaller deficits
B. Maintain a balanced budget
C. Run increasingly larger surpluses
D. Have increasingly larger deficits
Answer: D
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If the wage rate rises, then the firm's long-run marginal costs change, which in turn affects the firm's output level and its employment of labor. This phenomenon is known as
a. the substitution effect. b. the scale effect. c. the regressive-factor effect. d. the factor-price effect.
The figure above shows Clara's demand for CDs. At a price of $20 for a CD, the value of Clara's total consumer surplus for all the CDs she buys is
A) $40. B) $30. C) $20. D) $4.
All firms and all industries face identical long-run average cost curves
Indicate whether the statement is true or false
In the above figure, the production of 25 guitars and 25 ukuleles is
A. efficient production. B. impossible production. C. inefficient production. D. not possible since production always occurs along the PPC.