Classical macroeconomic theorists believed that during an economic downturn, unemployment would ________.
A. only lead to wage increases for the most highly skilled workers
B. lead wages to fall
C. have no impact on wages
D. lead wages to rise
Answer: B
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Business cycles ________, and recessions ________
A) are of equal length; are of equal severity B) are of equal length; differ in severity C) vary in length; are of equal severity D) vary in length; differ in severity
Economists who support market-based reforms for health care believe that increased competition among providers of health care would
A) increase costs but increase economic efficiency. B) increase costs and decrease economic efficiency. C) decrease costs and increase economic efficiency. D) decrease costs but decrease economic efficiency.
You are an analyst with a perfectly competitive firm that makes DRAM memory chips. You must manufacture the chips before you know what the demand will be. If demand turns out to be high, then producing where E[MR] = MC rather than where MRH = MC lowers your profit by an amount equal to ________.
A) area A
B) area A plus the trapazoidal area marked by E and E
C) the trapezoidal area marked by E and E
D) area B + area C
The fact that the United States exports Budweiser beer and imports Heineken beer can be explained by:
a. the differences in labor productivity in the U.S. and other countries. b. the differences in factor endowments in the U.S. and its trading partners. c. the world price of Budweiser beer is lower than Heineken beer. d. the fact that production of Budweiser beer in the U.S. is inadequate compared to its demand. e. the preference for foreign brands of beer by a part of the U.S. population.