If a firm is experiencing diminishing marginal returns, its marginal product is negative
a. True
b. False
B
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The classical model makes little distinction between the long run and short run because
A) wages and prices adjust so fast that the economy is quickly moving towards the long run. B) the model has not been fully developed yet. C) current changes influence the long run, so it is not possible to plan for the future. D) the classical economists knew that we are always operating in the short run.
Figure 4.5 illustrates a set of supply and demand curves for hamburgers. A decrease in demand and a decrease in quantity supplied are represented by a movement from
A) point a to point c. B) point d to point b. C) point b to point c. D) point c to point a.
A pure positive income shock leads to
A) an increase in leisure and consumption. B) an increase in leisure and work. C) an increase in work and consumption. D) an increase in leisure and taxes.
The law of demand shows that:
a. there is an inverse relationship between price and quantity demanded. b. the demand curve is positively sloped. c. when the price of a good increases, the quantity demanded increases. d. the supply curve is vertical. e. individual demand is the same as market demand.