Refer to the information provided in Figure 7.9 below to answer the question(s) that follow. 
Figure 7.9Refer to Figure 7.9. The firm is currently along isocost CD. If the price of capital is $40, then the price of labor is
A. $6.
B. $40.
C. $240.
D. indeterminate from this information.
Answer: B
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At point e in the above figure, the marginal product of labor
A) is less than the average product of labor. B) equals the average product of labor. C) is greater than the average product of labor. D) is at its maximum.
If a perfectly competitive firm finds that it is producing an amount of output such that MR > MC and P > AVC, it will
A) leave the industry. B) decrease its output. C) increase its output. D) not change its behavior.
If the consensus in securities markets is that a previous increase in the money supply will be inflationary, the likely result will be
A) higher real interest rates. B) higher nominal interest rates. C) lower real interest rates. D) lower nominal interest rates.
Happy Campers wants to prevent Campers R Us from entering the camping market. If Happy Campers expands its capacity, the expansion can lead to all of the following except which one?
A) lower Campers R Us' profit from entering the market B) increase Happy Campers' marginal cost C) increase Happy Campers' profit-maximizing quantity D) lower Happy Campers' profit-maximizing price