Consider a broom factory that permanently closes because of foreign competition. If the broom factory's workers cannot find new jobs because their skills are no longer marketable, then they are classified as:
A. seasonally unemployed.
B. frictionally unemployed.
C. structurally unemployed.
D. cyclically unemployed.
Answer: C
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The figure above shows Sam's budget line. Which of the following would result in Sam's budget line shifting leftward and not changing its slope?
A) a decline in his preferences for both gasoline and coffee B) an equal percentage reduction in the prices of both a gallon of gasoline and a pound of coffee C) a decrease in Sam's income D) a fall in the ratio of the price of a gallon of gasoline to the price of a pound of coffee
The reason a shock to one sector can spread to the whole economy is that
a. a decrease in production in one sector leads to an overall decrease in spending b. firms will need to help bail out other firms that are having troubles c. an increase in production in one sector will lead to an overall decrease in spending d. most shocks are not sector-specific but economy-wide e. workers laid off in the one sector will purchase more goods in another sector
The poverty threshold income level is
a. an absolute amount that applies to all families equally (i.e., $20,000 household earnings for 2010). b. variable with respect to family size and composition. c. adjusted once each decade, with the census numbers. d. all of the above.
The equilibrium price of a good or service is the price
a. at which the current quantity supplied by producers is equal to the potential output. b. fixed by the government so that producers do not over produce and consumers do not over purchase. c. at which all consumers can afford to purchase units of a good or service as long as they provide them with any value. d. at which the quantity supplied by producers is equal to the quantity demanded by consumers.