The presence of diminishing marginal returns to labor leads to decreasing marginal revenue product of labor and a downward-sloping demand for labor curve
a. True
b. False
A
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If the economy is in an inflationary gap, actual income is
A. to the right of LRAS B. to the left of LRAS C. on LRAS D. above LRAS
If the leading canned soup company introduces dozens of new flavors in order to dominate shelf space, the company is most likely trying to create a barrier to entry by
a. increasing the total investment needed to reach the minimum efficient size b. spending more on advertising than potential competitors can afford c. exploiting economies of scale d. crowding out the competition e. establishing an undifferentiated oligopoly
Which of the following is an example of the precautionary motive for saving?
A. Jordan sets aside $200 per month in case she has to pay for a new roof for her house. B. Every month, Chris puts $400 into his saving account so that he can buy a new car in a few years. C. Pat puts $400 per month in his 401(k) retirement account. D. Gerry and Terry put $2,000,000 in a trust fund that will go to their children when the parents die.
Refer to the information provided in Figure 27.3 below to answer the question(s) that follow.
Figure 27.3Refer to Figure 27.3. Assume the economy is at Point A. Higher oil prices shift the aggregate supply curve to AS2. If the government decides to counter the effects of higher oil prices by increasing government spending, then the price level will be ________ than P2 and output will be ________ than Y2.
A. greater; less B. greater; greater C. less; less D. less; greater