Refer to the short-run information provided in Figure 8.5 below to answer the question(s) that follow. 
Figure 8.5 Refer to Figure 8.5. If six drones are produced, total variable costs are
A. $10.
B. $13.33.
C. $70.
D. $80.
Answer: D
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The Earned Income Tax Credit
a. tends to increase income inequality. b. is a program that provides additional income to workers with above-average incomes. c. tends to reduce income inequality. d. is both a and b.
Suppose the nominal yield on interest rates during the next two years was expected to remain at 10%, but the yield on a one-year security was 10% and on two-year securities was 8%. Investors would:
a. Borrow for one year, invest for two years, and, at the end of the first year, roll over the loan. b. Probably do nothing, because markets are efficient, which means there is no way to arbitrage the markets. c. Borrow for two years, invest for one year, and then roll over the investment at the end of the first year. d. Borrow for two years and invest for two years, but at the end of the first year, re-borrow and re-invest at the market rate. e. Borrow for one year and invest for one year, but at the end of the first year, re-borrow and re-invest the borrowed funds at the expected rate.
If the tax function is T = t0 + t1Y where t1 equals 1/3, and if the marginal propensity to consume out of disposable income is 3/4, then the change in GDP per unit change in t0 (?Y/?t0) will be
a. ? 1. b. + 1. c. ? 1.5. d. ? 2. e. + 1.5.
In the above table, if this is a perfectly competitive firm and the market price of the product is $5 and the marginal factor cost of labor is $60, how many units of labor will the firm hire?
A) 2 B) 3 C) 4 D) 6