The marginal revenue product of capital is the
a. same as the marginal revenue product of labor if all resources are used
b. same as the marginal physical product of capital in a perfectly competitive market
c. change in the interest rate when a firm borrows $1 to buy new capital
d. change in total revenue generated by an additional $1 of loanable funds
e. price of adding one more machine to production
D
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Refer to Figure 9.5. If the government establishes a price floor of $2.50, how many pounds of berries will be sold?
A) 200 B) 300 C) 400 D) 600 E) 800
Dee is an accomplished actress and a homeowner who pays a landscaper to maintain her lawn rather than do it herself. Dee has determined that she can earn more in the hour it would take her to work on her lawn than she must pay her landscaper. This scenario is an example of which principle of economics?
a. Trade can make everyone better off. b. Markets are usually a good way to organize economic activity. c. Governments can sometimes improve market outcomes. d. Prices rise when the government prints too much money.
If the marginal propensity to save is 0.40, a $20 billion increase in investment spending would cause equilibrium output to:
a. increase by $50. b. increase by $80. c. decrease by $33. d. decrease by $40. e. decrease by $20.
From 1929 to 1993, the first four years of the Great Depression, U.S. output dropped by more than
a. 10 percent b. 80 percent c. 5 percent d. 50 percent e. 25 percent