A manager of a small firm who believes in the signaling theory of education would encourage her employees to obtain additional education to raise their on-the-job productivity

According to Okun's law, each extra percentage point of ________ unemployment is associated with a ________ widening of a negative output gap, measured in relation to potential output.

A. frictional; 0.5 percent B. cyclical; 2 percent C. frictional; 2 percent D. cyclical; 0.5 percent

Suppose that a monopolistically competitive market is at the long-run equilibrium. Based on this information, which of the following conclusions is NOT true?

A. Deadweight loss is zero. B. Firms' profits are zero. C. P = ATC > minimum of ATC. D. P > MC.