A farmer is deciding whether or not to add fertilizer to his or her crops. If the farmer adds 1 pound of fertilizer per acre, the value of the resulting crops rises from $80 to $100 per acre. According to marginal analysis, the farmer should add fertilizer if it costs less than:
A. $12.50 per pound.
B. $20 per pound.
C. $80 per pound.
D. $100 per pound.
Answer: B
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The Smith family buys much more macaroni when someone in the family is laid off. This means that the Smiths' ____ is negative
a. demand curve for macaroni b. income elasticity for macaroni c. Engel's law d. income e. price elasticity of demand for macaroni
Over the past century, the growth of labor productivity in the United States was highest in the _____
a. 1940s b. 1950s c. 1960s d. 1970s e. 1980s
The cost to a member bank of borrowing from the Federal Reserve is called the:
a. reserve requirement. b. price of securities in the open market. c. discount rate. d. yield on government bonds.
Which of the following dampens the effect on GDP of a change in government spending?
a. The money supply changes when real income changes. b. Taxes change when government spending changes. c. Money demand changes when real income changes. d. People do not expect much from the government. e. Aggregate spending does not respond to changes in the interest rate.