The marginal principle states that one should
A) increase the level of an activity if the marginal benefit exceeds its marginal cost.
B) if possible, pick the level at which the marginal benefit equals the marginal cost.
C) decrease the level of an activity if the marginal cost exceeds the marginal benefit.
D) all of the above
D
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Which of the following is the rate of unemployment that occurs after all adjustments in the labor market have occurred?
A) the structural rate of unemployment B) the cyclical rate of unemployment C) the natural rate of unemployment D) the frictional rate of unemployment
This chapter introduces the idea of opportunity cost
a. What is meant by opportunity cost? How are the opportunity costs of various choices compared? b. What is the opportunity cost of taking a year after graduating from high school and backpacking across Europe? Are people who do so being irrational?
Rational expectation theory implies that accurately anticipated change in aggregate demand: a. will increase RGDP in the long run
b. will affect RGDP and inflation only in the long run. c. may affect RGDP but not nominal GDP. d. will tend to be offset by the actions of input suppliers as they react to their inflation expectations.
In Macronesia, the MPC is approximately .80 . If disposable income changes from 1,000 billion pukas to 1,500 billion pukas, then consumption will change by a(n)
a. decrease of 500 billion pukas. b. increase of 500 billion pukas. c. increase of 400 billion pukas. d. increase of 800 billion pukas.