Choose the letter of the diagram in Figure 16.1 that Keynesians would use to illustrate the effects of stimulative fiscal policy on the economy.
A. a.
B. b.
C. c.
D. d.
Answer: D
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Refer to the table above. If there is a sixth unit that Jenny consumes, and the marginal benefit derived from that unit is -1, the total benefit derived when the sixth unit has been consumed is:
A) $0. B) $3. C) $29. D) $39.
According to the purchasing power parity, if the price level in the US rises relative to Mexico
a. The dollar will appreciate relative to the peso b. The dollar will depreciate relative to the peso c. There is no effect on either currency d. None of the above
The capital stock is fixed at 5 units, the price of capital is $60 per unit, and the price of labor is $20 per unit. 
Based on the above, how much does the 12th unit of output add to the firm's total variable cost?
A. $5 B. $4 C. $2.50 D. $20 E. $40
The monopolistic competitor
A. produces a good or service that has no close substitutes. B. is usually a small firm. C. has very little competition. D. is protected by substantial barriers to entry.