Automatic stabilizers decrease the impact of a recession on the level of economic activity because they
A) reduce the interest rate and so allow firms to increase their level of investment.
B) mean disposable income does not change by as much as real GDP.
C) increase taxes so the budget is always balanced.
D) raise the exchange rate so U.S. exports become more attractive to foreigners.
E) increase the quantity of money in circulation.
B
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Which of the following conditions does not need to occur for a market to achieve allocative efficiency?
A. Consumers' maximum willingness to pay equals producers' minimum acceptable price for the last unit of output. B. The sum of producer and consumer surplus is maximized. C. The total revenue received by producers equals the total cost of production. D. The marginal benefit of the last unit produced equals the marginal cost of producing that unit.
When a bakery manager reports that at her bakery, productivity of her 15 workers last month was 1,800 loaves per worker, she is referring to the:
A. Total product of labor B. Average product of labor C. Marginal product of labor D. Total product of capital