Figure 10.2 depicts a firm's marginal revenue product curve. If the output price is $5, what is the marginal product of the third worker?
A. four units of output
B. five units of output
C. six units of output
D. seven units of output
Answer: B
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The primary factor that caused some economists to lose their faith in the Keynesian approach to macroeconomic policy was
A) the high levels of unemployment that occurred during the Great Depression. B) the presence of both high unemployment and high inflation during the 1970s. C) theoretical proof that Keynes's ideas were invalid. D) evidence that Keynes's ideas were useful during economic recessions, but not during economic booms.
If a revenue-maximizing firm is told that the price elasticity of demand is equal to one, it should:
A. raise prices 1 percent. B. lower prices 1 percent. C. raise prices until the elasticity becomes very high. D. keep the price where it is.
How is the market supply curve found? In what ways is the process similar to the way the market demand curve is determined? In what ways are they different?
What will be an ideal response?
If the supply of automobiles becomes more inelastic, then a tax on automobiles is
A) paid more by the buyers after the change than before. B) paid more by the sellers after the change than before. C) always split evenly between the buyers and the sellers. D) paid more by the government after the change than before. E) always paid entirely by the buyers.