Refer to the information provided in Figure 8.8 below to answer the question(s) that follow. 
Figure 8.8 Refer to Figure 8.8. If this farmer is producing the profit-maximizing level of output, her marginal cost is
A. $2.
B. $8.
C. $9.
D. $12.
Answer: D
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A decrease in total revenue will result if
A) demand is inelastic and price increases. B) demand is elastic and price decreases. C) demand is inelastic and price decreases. D) demand is unitary elastic and price decreases.
Assume that the central bank purchases government securities in the open market. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the real GDP and reserve-related (central bank) transactions in the context of the Three-Sector-Model?
a. Real GDP rises, and reserve-related (central bank) transactions become more positive (or less negative). b. Real GDP and reserve-related (central bank) transactions remain the same. c. There is not enough information to determine what happens to these two macroeconomic variables. d. Real GDP falls, and reserve-related (central bank) transactions remain the same. e. Real GDP rises, and reserve-related (central bank) transactions remains the same.
Which of the following is possible when the market fails?
A. It is impossible for government intervention to improve the mix of goods and services. B. The mix of goods and services is at the correct point on the production possibilities curve. C. The mix of goods and services is the optimal mix. D. The mix of goods and services is on the production possibilities curve.
During an economic boom:
A. actual output exceeds potential output. B. potential output exceeds quantity demanded. C. potential output exceeds actual output. D. aggregate demand exceeds aggregate supply.