The demand for a factor of production depends largely on the
a. supply of the factor.
b. supply of other factors of production.
c. demand for other factors of production.
d. demand for the products that it helps to produce.
D
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At a Mufflers-R-Us repair shop customers have the opportunity to wait in a room with chairs, a television, magazines, coffee and donuts. The economic way of thinking suggests the muffler shop is
A) selling mufflers below cost. B) selling the additional goods and services below cost. C) attempting to increase its total profit D) engaging in unfair trade practice because it provides the goods and services free of charge. E) almost certainly doing none of the above.
Which of the following statements best describes excess supply, or surplus?
a. The area between the supply and demand curves above the equilibrium point is called excess supply, or surplus. b. The area between the supply and demand curves below the equilibrium point is called excess supply, or surplus. c. The area between the supply and demand curves to the right of the equilibrium point is called excess supply, or surplus. d. The area between the supply and demand curves to the left of the equilibrium point is called excess supply, or surplus.
Suppose that govt spending on defense rises by $50 billion. What happens to the AD curve?
A. It shifts right by $50 billion at each price level. B. It shifts right by more than $50 billion at each price level. C. It shifts right by less than $50 billion at each price level. D. The aggregate demand curve does not shift; the aggregate supply curve shifts right by $50 billion at each price level.
Refer to the above table. Suppose the marginal revenue product of the 7th worker is $1100. This implies that
A. the price of the good is $1. B. the price of the good is $8. C. the price of the good is $20. D. we cannot tell what the price of the good is without more information.