Total product begins to fall when:
A. average product is below zero.
B. marginal product is maximized.
C. marginal product is zero.
D. average product is negative.
Answer: C
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A major loophole was punched through the McFadden Act as banks
A) formed bank holding companies. B) developed negotiable certificates of deposit. C) began paying interest on checkable deposits. D) converted themselves into savings-and-loans.
A nation's production possibilities curve might shift to the left (inward) as a result of:
A. technological advance. B. increases in the size of the labor force. C. the depletion of its soil fertility due to overplanting and overgrazing. D. investing in more capital goods.
In the classical model, how do shifts in aggregate demand affect real GDP?
A. Increases in aggregate demand decrease real GDP. B. Increases in aggregate demand increase real GDP. C. Real GDP will remain unchanged. D. Decreases in aggregate demand increase real GDP.
The Specialty Cake Store, a monopolistically competitive firm, is producing 200 decorated cakes per day and selling each cake for $12. At that production level ATC is $20, AVC is $15, AFC is $5, and both MR and MC are $8. This firm should
A. continue to produce 200 cakes, as price is greater than AFC. B. produce zero cakes and just pay fixed costs. C. decrease output to the point where marginal cost equals average cost. D. increase output to the point where price equals marginal cost.