Refer to the information provided in Figure 7.8 below to answer the question(s) that follow. 
Figure 7.8Refer to Figure 7.8. The firm is currently along isocost CE. If the price of capital is $12, then the price of labor is
A. $8.
B. $12.
C. $80.
D. $120.
Answer: A
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Which scenario below would lead to lower profits as we double the inputs used by the firm?
A) Increasing returns to scale with constant input prices B) Constant returns to scale with constant input prices C) Constant returns to scale with rising input prices (perhaps because the firm is not a price-taker in the input markets) D) all of the above
In a cartel, participating members can cheat by
A) letting more entrants join the cartel. B) leaving the industry. C) producing a lower production level than the cartel quota. D) charging a slightly lower price and raising production.
If the legal reserve requirement decreases, the
a. money multiplier increases b. money multiplier decreases c. amount of excess reserves the bank has decreases d. money multiplier stays the same e. amount of excess reserves stays the same
Which of the following could increase the supply of labor in the market for cranberry pickers? (i) a change in the preferences of women toward full-time work (ii) an increase in the output price (iii) an increase in the wages paid to apple pickers (iv) a decrease in the wages paid to apple pickers
a. (ii) only b. (i), (ii), and (iv) only c. (i) and (iv) only d. (ii) and (iii) only