Suppose you are using 10 units of labor in your short-run production process. At this point, the average product of your labor is 10, and the marginal product of the last unit of labor was 14. Given this, we know that the
A. marginal product of labor must be decreasing.
B. average product of labor must be decreasing.
C. marginal product of labor must be increasing.
D. average product of labor must be increasing.
Answer: D
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The aggregate supply curve shifts
A) rightward if potential GDP decreases. B) rightward if the money wage rate falls. C) leftward if the aggregate demand curve shifts leftward. D) rightward if the money wage rate rises. E) leftward if potential GDP increases.
We can be sure that the equilibrium price will fall when: a. supply and demand both increase
b. supply and demand both decrease. c. supply increases and demand decreases. d. supply decreases and demand increases.
Consider an economy made up of 100 people, 60 of whom hold jobs, 10 of whom are looking for work, and 15 of whom are retired. The number counted as unemployed is:
A. 10. B. 15. C. 40. D. 30.
Which of the following is the most likely cause of a recession according to classical and new classical models?
a. government policy. b. unstable expectations. c. a fall in expected profits. d. an anticipated change in the money supply. e. none of the above.