The marginal product of an input is defined as the change in:
A. total input attributable to the last unit of an output.
B. average output attributable to the last unit of an input.
C. total output attributable to the last unit of an input.
D. average output attributable to the last unit of an output.
Answer: C
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The Business Cycle Dating Committee defines a recession as
A) a significant decline in activity visible in industrial production, employment, real income, and wholesale/retail trade lasting more than a few months. B) two consecutive quarters of declining real GDP. C) a significant decline in inflation and unemployment lasting more than a few months. D) two consecutive quarters of declining nominal GDP.
If business taxes rise in a large open economy, it causes the current account to ________ and saving to ________
A) fall; fall B) rise; remain unchanged C) fall; remain unchanged D) rise; fall
Fresh Flour makes baking flour and sells its flour in 4 pound sacks or bags. The managers of Fresh Flour are considering whether the firm should make or buy the flour sacks. To make the sacks, Fresh Flour needs a $500,000 piece of equipment. Using this equipment, Fresh Flour can make a flour sack for $0.01 and, for simplicity, ignore taxes and assume that the $0.01 cost includes depreciation and
all other costs. Fresh Flour would finance the $500,000 investment using its own funds and, if it purchased the flour sacks from another firm, it would pay $0.19 a flour sack. The life span of the equipment is 10 years and it has no salvage value at the end of the ten years. If the discount rate is 6 percent and the firm needs 400,000 flour sacks a year, what is the present value of the equipment? A) $623,850 B) $459,250 C) $500,962 D) $529,926
Which of the following persons would be considered employed?
A) Jennifer, a teacher who is on a two month maternity leave but will return to work after. B) All of the above persons are considered employed. C) Sam, a 12 year old who helps his mom stock shelves at her gift shop. D) Ron, a recently enrolled full-time college student in hopes of finding a well-paying job.