(Appendix) Suppose the production function for widgets is Q = (KL)½. If capital is fixed at 4 units, what is the marginal product of labor when you produce 10 units of output?
A. 0.4
B. 1.5
C. 1
D. 0.2
Answer: D
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If the Fed engages in quantitative easing, it has likely
A) started paying interest on required reserves. B) increased the federal funds rate by selling private securities. C) increased the discount rate to prevent inflation. D) decreased the discount rate by selling its own securities. E) decreased the federal funds rate to almost zero by buying large sums of securities.
The above figure graphs the price of a bushel of wheat and housing starts. The graph shows the variables are
A) strongly positively related. B) strongly negatively related. C) not related. D) related via an indirect relationshi
Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the short run would be:
A. P1 and Y2. B. P3 and Y1. C. P2 and Y2. D. P2 and Y3.
In the price range where demand is inelastic, a decrease in price will result in a decrease in total revenue.
Answer the following statement true (T) or false (F)