As the amount of labor input increases ________. This means that the marginal product of labor (MPL) ________
A) the slope of the production function increases; goes up
B) the slope of the production function falls; declines
C) the slope of the production function falls; goes up
D) the slope of the production function increases; declines
E) none of the above
B
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According to the classical model, money influences
a. only prices. b. nominal and real variables in both the long and short-run. c. both nominal and real variables but only in the short-run. d. only nominal variables.
Profit is equal to: a. price times quantity
b. total cost times quantity. c. total cost minus total revenue. d. total revenue minus total cost.
When comparing the U.S. and Mexican car assembly industries, the disadvantage of higher U.S. wages is offset by
A) Mexican trade barriers. B) trade adjustment assistance in the United States. C) higher productivity in the United States. D) a lower opportunity cost in Mexico.
The income-expenditure multiplier leads to greater than one-for-one changes in output when spending changes because:
A. multiple deposits are generated when new reserves are produced through fractional reserve banking. B. the direct changes in spending change the income of producers which leads to additional changes in spending. C. real output continues to adjust until it equals nominal output. D. change the income of producers leads to additional tax revenue for the government, which will changes their level of spending.