If a perfectly competitive firm can acquire the services of as much capital as it wishes at a constant rental rate of r per year, it should employ capital up to the point at which the
A. rental rate is equal to marginal cost.
B. rental rate is equal to variable cost.
C. marginal product of capital is equal to r.
D. value of the marginal product of capital is equal to r.
Answer: D
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Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
Which of the following is true of international trade?
A) International trade reduces the total surplus enjoyed by an economy. B) International trade benefits all participants equally. C) International trade in services is not allowed. D) International trade increases overall economic efficiency.
Suppose there are 100 million in the labor force, and 6 million unemployed people. During the next month, 200,000 people lose their jobs and 300,000 find jobs. The new total of employed persons is ________ and the new unemployment rate is ________
A) 100.1 million; 5.8 percent B) 100 million; 6.1 percent C) 94.1 million; 5.9 percent D) 93.9 million; 6.1 percent
In the above figure, if the natural monopoly is regulated with a marginal cost pricing rule, then the deadweight loss to society is
A) zero. B) ecf. C) gde. D) efcb.