Recently, the price of gasoline dropped to just under $3.50/gallon. Economic analysts currently are focusing on questions concerning the likely impacts of this price decrease on the demand for gasoline. The branch of economics that deals with these
questions is
A) Normative economics. B) Macroeconomics.
C) Positive economics. D) Microeconomics.
Answer: C
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Bureaucratic overprovision of a public good could occur because
A) of a failure of minimum differentiation. B) of rational ignorance among voters. C) voters want more of the good than do bureaucrats. D) bureaucrats attempt to maximize efficiency.
Suppose capital and labor are perfect substitutes resulting in a production function of q = K + L. That is, the isoquants are straight lines with a slope of -1
Derive the long-run total cost function TC = C(q) when the wage rate is w and the rental rate on capital is r.
The phrase "sticky prices" refers to the prices of:
A. some inputs taking longer to adjust to the price level than the output it creates. B. some output taking longer to adjust to the price level than the inputs used to create it. C. more durable goods "sticking," and not adjusting to the price level. D. consumer goods not adjusting to the price level.
The percentage of the working-age population in the labor force (= employed + officially unemployed) is called the:
A. labor force participation rate. B. employment-population ratio. C. work-activity rate. D. work-nonwork ratio.