Which of the following types of expenditures is more volatile than plant and equipment investment?
A. consumption of nondurable goods
B. consumption of services
C. housing investment
D. consumption of durable goods
Answer: C
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Marginal revenue product falls as more labor is hired because
A) the price of the product must fall for a perfectly competitive firm to sell more. B) the marginal product of labor is negative as additional units of labor are hired. C) the wage rate rises as more workers work more hours. D) the marginal product of labor falls as a result of the law of diminishing returns.
When choosing the production level for tomorrow you find that at an output of 100 units, the total variable costs are $20,000 and the average fixed cost is only $50 . If the market price is $200, you should
a. hire an economic consultant b. produce at a loss equal to $5,000 c. produce more than 100 units d. produce fewer than 100 units e. produce where MC is at a minimum
Even though firms in competitive price-searcher markets do not produce at minimum ATC, competitive price-searcher markets may still be consistent with economic efficiency because
a. strict government regulations force the firms in these markets to keep their costs low. b. they provide consumers with a greater diversity of products. c. they encourage more advertising in both price-searcher and price-taker markets. d. special legal protections for price searchers make it possible for them to more efficiently use resources.
Both the long-run and short-run aggregate supply curves will shift when
A. they are both upward sloping. B. the government increases defense spending. C. an event occurs which is expected to last only a short period of time. D. the endowments of the factors of production change.