Dairy farmers use sawdust for milk cow bedding. What happened to the price of milk because of the housing slowdown in 2007?
A) The price of milk rose as the demand for milk rose.
B) The price of milk rose as the supply of milk decreased.
C) The price of milk fell as the demand for milk decreased.
D) The price of milk fell as the supply of milk increased.
Answer: B) The price of milk rose as the supply of milk decreased.
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Part of the spending on the Doyle Drive project in northern California came from the American Reinvestment and Recovery Act, which is an example of discretionary fiscal policy aimed at increasing
A) tax revenues and the federal budget surplus. B) the money supply and money demand. C) disposable income and interest rates. D) real GDP and employment.
Increasing returns to scale in production means
A) more than 10% as much of all inputs are required to increase output 10%. B) less than twice as much of all inputs are required to double output. C) more than twice as much of only one input is required to double output. D) isoquants must be linear.
What is a production set?
Refer to the information provided in Table 8.1 below to answer the question(s) that follow.
Table 8.1 
Refer to Table 8.1. In the short run, if the price of labor (L) is $5 per unit, the price of capital (K) is $10 per unit, and firms attempt to minimize costs, then this firm's total cost of producing one unit of output is
A. $100. B. $120. C. $220. D. indeterminate from this information.