Figure 2-10
Consider the production possibilities frontier for food and clothing in . A movement from point J to point K could be caused by
a.
the development of new and better technology
b.
increasing unemployment
c.
the movement of society into a recession
d.
the law of increasing opportunity costs
e.
eliminating productive inefficiency
e
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Refer to the above figure. Unexpected expansionary monetary policy has caused the aggregate demand curve to shift to AD2. In the short run
A) the unemployment rate can increase or decrease depending upon how much the LRAS will shift. B) the unemployment rate will be smaller than the rate before the expansionary monetary policy. C) the unemployment rate will be larger than the rate before the expansionary monetary policy. D) the unemployment rate will be the same rate as before the expansionary monetary policy.
Total cost schedule for a competitive firm: 
If market price is $60, how many units of output will the firm produce?
A. 3 units of output. B. 1 unit of output. C. 2 units of output. D. Zero units of output because the firm shuts down. E. none of the above.
College graduates earn much more than grade school dropouts mainly because
A. the college graduate is older. B. the college graduate has learned more. C. the college graduate is probably smarter, richer, more motivated, has better connections, and comes from a more supportive learning environment. D. the college graduate is more likely to have grown up in a large city, and to be more cosmopolitan.
Game theory is not useful in understanding perfect competition because in a perfectly competitive market:
A. there are too many firms to be able to model their behavior accurately using game theory. B. the payoffs to firms' choices are unknown. C. each firm only cares about its own profit, so there is no interdependence. D. no single firm can influence the market price, so firms' decisions are not interdependent.