Related to the Economics in Practice on page 198: If the long-run average cost curve in an industry has a long, flat section, which of the following must be true?
A. There would be no difference between the industry's short-run average cost curve and its long-run average cost curve.
B. Existing firms have no incentive to expand.
C. There is no single point on the curve that is the best.
D. Small firms have higher average costs than large firms.
Answer: C
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When Burning Bob's Salsa House hires one worker, 30 customers can be served in an hour. When Burning Bob's Salsa House hires two workers, 50 customers can be served in an hour. The marginal product of the second worker is ________ customers served per hour.
A. 20 B. 30 C. 50 D. 67.5
By raising aggregate demand more than anticipated, policymakers
a. reduce unemployment for awhile. b. raise unemployment for awhile. c. reduce unemployment permanently. d. None of the above is correct.
What is collective bargaining?
a. a negotiation between a union and a company b. a partnership agreement among several firms c. the cost advantage of employing union labor d. group ownership of the means of production
If the Fed increases the quantity of money, in the short run the ________ and in the long run the ________
A) nominal interest rate falls; the price level falls B) nominal interest rate falls; the price level rises C) price level rises; the nominal interest rate falls D) nominal interest rate rises; the price level falls E) nominal interest rate rises; the price level rises