Refer to the above table. At what quantity of labor does the law of diminishing marginal product set in ?
a. after 2 units
b. after 6 units
c. after 3 units
d. after 1 unit
Answer: a. after 2 units
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Michael values a stainless steel refrigerator for his new house at $3,500, but he succeeds in buying one for $3,000 . Michael's consumer surplus is
a. $500. b. $3,000. c. $3,500. d. $6,500.
Inflation is problematic if
a. it is less than the percentage increase in nominal income. b. it is less than the nominal return on saving. c. it equals the growth rate of real GDP in the long run. d. it distorts relative prices, causing a misallocation of resources.
Congestion pricing
A. is a tax. B. keeps nasal passages clear. C. is never efficient. D. all of these answer options are correct.
Holding other factors constant, if terrorist attacks increase the desire for precautionary saving, then the real interest rate will ________ and the equilibrium quantity of saving and investment will ________.
A. decrease; increase B. increase; increase C. increase; decrease D. decrease; decrease