Figure 24-4 -Refer to Figure 24-4. Given the Economy Is at Point

question 26

Multiple Choice

Figure 24-4

-Refer to Figure 24-4. Given the economy is at point A in year 1,the unemployment rate will ________ and the price level will ________ in year 2.

• A) rise; rise
• B) rise; fall
• C) fall; rise
• D) fall; fall

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Definitions:

Implicit Costs

The opportunity costs of using resources owned by the business for its operations instead of allocating them to their best alternative use.

Interest Rate

The expense associated with taking out a loan or the earnings from investments, usually shown as a percent of the total amount invested or borrowed.

Specialization

The process of focusing effort and resources on a limited number of activities to gain efficiency or expertise.

Average Cost

The total cost of production divided by the total quantity produced, representing the cost per unit of output.