Figure 8-3
Figure 8-3 shows a firm’s total profit function. At an output of 40, the firm’s total profit equals ____.
A. 10
B. 40
C. 200
D. 400
Answer: A
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Lee and Cody are playing a game in which Lee has the first move at A in the decision tree shown below. Once Lee has chosen either aggression or cooperation, Cody, who can see what Lee has chosen, must choose either aggression or cooperation at B or C. Both players know the payoffs at the end of each branch. 
If Lee chooses aggression, Cody will respond with ________, and if Lee chooses cooperation, Cody will respond with ________.
A. aggression; aggression B. cooperation; aggression C. cooperation; cooperation D. aggression; cooperation
After the housing bubble burst, consumer confidence plummeted and housing sales dropped to all-time lows. This caused the demand curve for normal goods to shift
a. inwards b. outwards c. stay constant d. none of the above
Interest rates fall and investment falls. Which of the following could explain these changes?
a. The government goes from a surplus to a deficit. b. The government repeals an investment tax credit. c. The government replaces a consumption tax with an income tax. d. None of the above is correct.
A change in demand means there has been a shift in the demand curve, and a change in quantity demanded
A. Results from a change in price of other goods. B. Means that price has changed and there is movement along the demand curve. C. Means a shortage or surplus will result from holding prices constant. D. Also means demand has shifted.