Joey cuts lawns during the summer. Let q equal the number of acres mowed per day, and let L equal the number of hours worked per day
Joey never works more than eight hours per day, and during that time his short-run production function is q = 0.2 ? L. Which of the following statements is FALSE?
A) Joey's marginal product equals his average product.
B) Joey's marginal product diminishes by 0.2 for each additional hour worked.
C) Joey's average product is constant.
D) Joey's marginal product is constant.
B
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In the above figure, start with the economy in equilibrium at point A. Then an unanticipated reduction in aggregate demand triggers a shift from AD1 to AD2. In the short run, this would cause
A) the price level to move from P1 to P2, but real Gross Domestic Product (GDP) would stay at Y1. B) the price level to fall from P1 to P2, real Gross Domestic Product (GDP) to fall from Y1 to Y2, and the rate of unemployment to increase. C) the price level to fall by some amount less than P1 but greater than P2, and the rate of unemployment would decrease. D) no change in either the price level or real Gross Domestic Product (GDP), but a decrease in unemployment.
If input prices rise as industry output expands, then a perfectly competitive firm's marginal cost and average cost curves will: a. shift upward
b. shift downward. c. not shift. As the firm increases production, however, costs increase as the firm moves upward to the right along these curves. d. not shift. As the firm increases production, however, costs decrease as the firm moves downward to the left along these curves.
Which of these is the key assumption of the Classical school of economic thought? a. An economy is self-adjusting in nature
b. Wages and prices are sticky downward. c. Economic agents are rational in behavior. d. Labor is the source of wealth in an economy.
Which of the following is NOT included in the M1 money supply?
A) currency B) passbook savings accounts C) traveler's checks D) checkable and debitable accounts