Which of the following explains the cause of the change in the unemployment rate at the end of a recession?
A) Firms are hesitant to rehire laid off workers as they continue to operate below capacity.
B) Discouraged workers leave the labor force, and this makes the unemployment rate rise.
C) Discouraged workers return to the labor force, and this makes the unemployment rate fall.
D) Firms rapidly hire new workers at the first sign of an increase in demand for their goods.
Question 2
Refer to Figure 4-4. At a price of 18 consumers are willing to buy 40 pounds of tiger shrimp. Is this an economically efficient quantity?
A) Yes, because 18 shows what consumers are willing to pay for the product.
B) No, the marginal benefit of the 40th unit exceeds the marginal cost of that 40th unit.
C) Yes, otherwise consumers would not buy 40 units.
D) No, the marginal cost of the 40th unit exceeds the marginal benefit of the 40th unit.
Lilly Martin Spenser’s painting, Domestic Happiness (1844), reflects the change in attitudes toward
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