Damian owns a tattoo parlor and has hired three tattoo artists to work for him. The marginal product of labor is 8 for the first artist, 12 for the second artist, and 7 for the third artist. What is Damian's average product of labor for these three
tattoo artists?
What will be an ideal response?
The average product of labor is the average of the marginal products of labor. Therefore, Damian's average product of labor for these three artists is (8 + 12 + 7 ) / 3 = 9.
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Use the following graph for a private closed economy (an economy with only a private sector and no international trade) to answer the next question. 
In this economy, investment is
A. $50 billion. B. $150 billion. C. $100 billion. D. $200 billion.
Two firms, Industrio and Capitalista, have access to five production processes, each of which has a different cost and gives off a different amount of pollution. The daily costs of the processes and the corresponding number of tons of smoke emitted are shown in the table below. Both firms currently use process A, and each emits 4 tons of smoke per day. The government is considering two plans to reduce pollution: requiring both firms to reduce pollution by 25 percent or auctioning pollution permits. Each permit would entitle the owner to emit one ton of smoke per day. Without a permit, no smoke can be emitted.Process(smoke/day) A(4 tons/day) B(3 tons/day) C(2 tons/day) D(1 ton/day) E(0 tons/day) Cost to Industrio ($/day) $350$400$500$700$1,000 Cost to Capitalista
($/day) $225$250$290$400 $600Suppose the government decides to auction 6 permits. The government conducts the auction by starting at a price of $1 and asking how many permits each firm wants to buy at that price. If the total is more than 6, it raises the price by $1 and asks again until the total quantity demanded falls to 6. Under this system, each permit will sell for ________ with Industrio buying ________ and Capitalista buying ________. A. $41; 4; 2 B. $31; 2; 4 C. $101; 3; 3 D. $51; 4; 2
Derive the budget line equation for the case where good 1 is a composite good. What is the vertical intercept and what is the slope?
What will be an ideal response?
A country reported nominal GDP of $100 billion in 2010 and $75 billion in 2009 . It also reported a GDP deflator of 125 in 2010 and 120 in 2009 . Between 2009 and 2010,
a. real output and the price level both rose. b. real output rose and the price level fell. c. real output fell and the price level rose. d. real output and the price level both fell.