Which one of the following statements is TRUE?
A. The sum of wages lost by all unemployed workers gives an accurate, comprehensive estimate of the total cost of unemployment.
B. The existence of unemployment places the economy at a point inside its production possibilities curve.
C. The unemployment rate is the percentage of the population not working.
D. To be counted as part of the labor force, an individual must be working more than 40 hours a week.
Answer: B
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The table above gives production information for Bob's Baseball Cap Company. Bob's total cost when zero caps are produced is $200 and workers cost $10 per hour. The average total cost of producing 4 baseball hats per hour is
A) $1.67. B) $50.00. C) $52.50. D) More information is needed to answer the question.
When positive spending shocks occur, transfer payments automatically fall
a. True b. False