If the long-run supply curve in a perfectly competitive industry is upward sloping, this is because
A) firms are different.
B) firms are identical.
C) input prices rise as the industry expands.
D) Either A or C.
D
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If the economy is in equilibrium with real GDP less than potential GDP, there is ________ gap, and a fiscal policy that ________ is appropriate
A) a recessionary; decreases aggregate demand B) an inflationary; increases aggregate demand C) a recessionary; increases aggregate demand D) an inflationary; decreases aggregate demand E) a recessionary; increases potential GDP
In the regression model Yi = β0 + β1Xi + β2Di + β3(Xi × Di) + ui, where X is a continuous variable and D is a binary variable, β3
A) indicates the slope of the regression when D=1. B) has a standard error that is not normally distributed even in large samples since D is not a normally distributed variable. C) indicates the difference in the slopes of the two regressions. D) has no meaning since (Xi × Di) = 0 when Di = 0.
Refer to the information provided in Figure 7.6 below to answer the question(s) that follow. 
Figure 7.6Refer to Figure 7.6. The shoe manufacturer currently produces 50 units of output. If this shoe manufacturer increases labor from 15 to 20, the marginal product of the 20th worker
A. is zero, as the total number of shoes produced remains at 50. B. is 8.5, as capital can be reduced by 8.5 units when the 20th worker is hired. C. cannot be determined because output remains constant. D. cannot be determined because both capital and labor have been increased.
An investment demand curve shows the varying amounts of investment that would be undertaken at various levels of:
A. The average price in the economy B. Consumer spending C. Personal saving D. The real interest rate