Figure 7-15
For a firm at equilibrium, at point A in Figure 7-15
a.
the price of labor is high relative to the price of machines.
b.
the MPP of labor is greater than the MPP of machines.
c.
the MPP of labor is less than at point B.
d.
output is higher than at point B.
c
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The average total cost curve
A) is U-shaped. B) diminishes initially because average fixed costs diminish. C) increases eventually because of diminishing returns. D) All of the above answers are correct.
Jane is attempting to maximize utility by selecting a market basket of goods. For each of the goods in the market basket the marginal utility per dollar spent is equal
There are some goods which are affordable but do not appear in the Jane's market basket. If Jane has maximized utility, the marginal utility per dollar spent on each of the goods that does not appear in the market basket is: A) too high. B) too low. C) zero. D) infinite. E) none of the above
The purchase of a new machine to replace the one that is worn out is:
a. not included in GDP. b. included in gross investment. c. considered a personal consumption expenditure. d. not included in GNP. e. an increase in inventories.
How does the Fed decide which monetary measure should be the focus of its monetary policy choices?
A) The Fed would like to track a monetary measure that is most closely related to the market interest rate. B) The Fed would like to track a monetary measure that is most closely related to the quantity of money demanded by economic agents. C) The Fed would like to track a monetary measure that is most closely related to the level of real GDP and the price level. D) The Fed would like to track a monetary measure that is most closely related to government spending.