The marginal product of labor may increase rapidly initially as more
A) workers are able to specialize.
B) total product is decreasing.
C) the amount of other inputs is held constant.
D) workers will get crowded in a fixed factory.
Answer: A
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The natural rate of unemployment is equal to the unemployment rate when there is only:
A. structural and frictional unemployment. B. frictional unemployment. C. cyclical unemployment. D. structural and cyclical unemployment.
In the figure above, if pizza production is restricted to 5,000 pizzas a day, the deadweight loss is
A) $45,000 per day. B) $12,500 per day. C) $22,500 per day. D) $90,000 per day. E) zero.
The multiplier will be smaller, other things being equal: a. the smaller the fraction of each dollar earned that goes to taxes
b. the larger the MPC. c. the smaller the fraction of each dollar of disposable income that goes to saving. d. None of the above are true.
The positive slope of the consumption function indicates that
a) consumers spend less out of each extra dollar of income b) the amount of household wealth is subject to change c) when prices fall consumers spend more d) consumers increase their total consumption expenditure when disposable income increases