Refer to the information provided in Figure 8.9 below to answer the question(s) that follow. 
Figure 8.9
Refer to Figure 8.9. If the market price of hay falls to $18, then to maximize profits this farmer should produce
A. 350 bales of hay.
B. 500 bales of hay.
C. 750 bales of hay.
D. a level of output that is indeterminate from this information.
Answer: A
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A typical economy produces thousands of different goods. Is it accurate to say that society faces a production possibilities frontier?
A. No, because two dimensions cannot capture the complexity of a full economy. B. No, although a graph with several thousand dimensions would be appropriate. C. Yes, although society does not face opportunity cost and the model does not apply. D. Yes, because scarcity always imposes opportunity costs. E. Uncertain, economic theory has no answer to this question.
Microsoft's success over Apple although Apple had a technologically superior product is the result of:
a. increasing returns in a network-based business b. Microsoft's economies of scale over a wide range of output c. the revenue sources derived from Microsoft's intellectual property d. superior marketing and promotions e. all of the above
The ingredients that go into making any good or service are called the:
A. output makers. B. factors of production. C. factors of output. D. production ingredients.
Which one of the following conclusions is not supported by the intertemporal substitution hypothesis?
A. Hours of work increase as the wage rises and decline as the wage falls. B. Hours of work over the life cycle will be inversely related to wages over the life cycle. C. An unemployed person might choose to become a discouraged worker during a low-wage recession with an eye toward returning to the labor market when wages increase. D. The profile of hours of work over the life cycle will have roughly the same shape as the age-earnings profile. E. A high wage worker may choose to work 60+ hours a week during her peak wage years in order to retire at a younger age later in life.