What is the opportunity cost of unemployment for an economy? What social problems have been linked to higher rates of unemployment?
What will be an ideal response?
The opportunity cost of unemployment is the production of goods and services that could have been produced if the unemployed workers would have worked. Besides forgone production, unemployment has been linked to a number of social problems such as crime, political unrest, depression, heart disease and other illnesses.
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The figure above portrays a total revenue curve for a perfectly competitive firm. Curve A is straight because the firm
A) is a price taker. B) faces constant returns to scale. C) wants to maximize its profits. D) has perfect information.
Keynes argued that I. Capitalism did not always lead to full employment. II. Nominal prices were more important than relative prices
A) I only B) II only C) Both I and II D) Neither I nor II