Holdouts who set a price for land above their opportunity cost and refuse to budge on selling their land for a lower price can reduce the size of the economic pie
Indicate whether the statement is true or false
TRUE
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What did Milton Friedman and E.S. Phelps argue with respect to the Phillips Curve?
A) The inverse relationship between unemployment and inflation only holds in the long run. In the short run, unemployment and inflation are positively related. B) The inflation rate will consistently be 2 percentage points below the unemployment rate. C) Economic participants would soon understand activist policymakers' strategy and revise their expectations, making discretionary efforts to fine-tune the economy ineffective. D) The Phillips Curve could accurately guide activist policy makers over the long run.
Since price tends to equal total utility, the price of water is low and the price of diamonds is high.
Answer the following statement true (T) or false (F)
Refer to Figure 15-7. Suppose the Fed sells Treasury Bills in pursuit of contractionary monetary policy. Using the static AD-AS model in the figure above, this situation would be depicted as a movement from
A) B to C. B) B to D. C) C to B. D) C to D. E) A to B.
A firm is making a profit under conditions of monopolistic competition if, at the equilibrium output,
a. AR is above MR. b. MR is above AR. c. AR is above AVC. d. AR is above ATC.