Which of the following is the main weakness of the classical model?
a. It assumes that the labor supply curve is vertical.
b. It assumes that the labor supply curve is horizontal.
c. It assumes that the labor market clears.
d. It assumes that the labor demand curve is horizontal.
e. It assumes that the labor demand curve is vertical.
Which of the following could explain the shift in the production possibilities frontier
shown in Figure 2-7 from AC to AB?
Figure 2-7
Figure 12-4 shows the number of calculators that can be produced daily by various
numbers of workers. What is the marginal product of hiring the fifth worker?
Figure 12-8 provides production data for Peg’s Pie Shop, indicating the output per day
with different numbers of employees. The shop sells its pies and hires its labor in
perfectly competitive markets. Currently, the equilibrium price of a pie is $5, and the
equilibrium wage rate is $80 per day. In order to maximize profit, Peg’s Pie Shop should
hire
As long as debt grows by the same percentage as nominal GDP, the debt-to-GDP ratio
will stay constant but the interest payments-to-GDP ratio will increase.
Seasonal unemployment
a. is short-term joblessness experienced by those entering the labor market for the first
time
b. arises from a mismatch between available jobs and workers’ skills or geographic
location
c. is joblessness affecting people such as construction workers, farm workers and retail
sales clerks after the Christmas shopping season
d. is joblessness resulting from business cycle movements
e. does not exist when the economy is at full employment
In a perfectly competitive market, the market demand curve is horizontal.
Along its long-run average total cost curve, a firm employs
John Maynard Keynes and his followers argued that
a. the classical model does a good job of explaining the economy’s operation in both the
short run and long run
b. the short run is unimportant so economists should focus their attention on the long
run
c. the economy should be allowed to function with minimal government interference
d. the economy operates the same way in both the short run and long run
e. while the classical model might explain economic performance in the long run, the
long run could take a long time to reach
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