Refer to the information provided in Figure 28.7 below to answer the question(s) that follow.
Figure 28.7Refer to Figure 28.7. If the natural unemployment rate equals 6%, the unemployment rate at U2 could be
A. 4%.
B. 5%.
C. 6%.
D. 7%.
Answer: D
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You have just opened a new Italian restaurant in your hometown where there are three other Italian restaurants
Your restaurant is doing a brisk business and you attribute your success to your distinctive northern Italian cuisine using locally grown organic produce. What is likely to happen to your business in the long run? A) If your success continues, you will be likely to establish a franchise and expand your market size. B) Your competitors are likely to change their menus to make their products more similar to yours. C) If you continue to maintain consistent quality, you will be able to earn profits indefinitely. D) Your success will invite others to open competing restaurants and ultimately your profits will be driven to zero.
The level of output at which all economies of scale have been exhausted is known as
A) constant returns to scale. B) optimal economic size. C) minimum efficient scale. D) the economically efficient output level.
As the marginal propensity to consume (MPC) decreases, the spending multiplier
a. increases. b. decreases. c. remains constant. d. becomes indefinable.
A price ceiling will be binding only if it is set
a. equal to the equilibrium price. b. above the equilibrium price. c. below the equilibrium price. d. either above or below the equilibrium price.