Assume that a firm is operating in the short run and all resources are fixed except for labor. The total product curve for this firm will increase at a decreasing rate because:
a. value of marginal product of labor is unchanged as more labor is hired.
b. marginal product of labor will decline as more labor is hired.
c. value of marginal product of labor will increase as more labor is hired.
d. marginal product of labor is unchanged as more labor is hired.
B
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Suppose a nation's population grows by 2 percent and, at the same time, its GDP grows by 5 percent. Approximately how fast will real GDP per person increase?
A) 3 percent per year B) 2 percent per year C) 5 percent per year D) 10 percent per year
Which of the following goods is most likely to have a negative income elasticity of demand?
a. Automobiles b. Bargain brand noodles c. Shoes d. Fine Jewelry
The unemployment rate in an economy is 6 percent. The total population of the economy is 290 million and the size of the civilian labor force is 150 million. The number of unemployed workers in this economy is:
A. 12 million. B. 9 million. C. 24 million. D. 6 million.
In the above figure, start with the economy in equilibrium at point A. Then an unanticipated reduction in aggregate demand triggers a shift from AD1 to AD2. In the short run, this would cause
A. the price level to fall by some amount less than P1 but greater than P2, and the rate of unemployment would decrease. B. the price level to fall from P1 to P2, real Gross Domestic Product (GDP) to fall from Y1 to Y2, and the rate of unemployment to increase. C. no change in either the price level or real Gross Domestic Product (GDP), but a decrease in unemployment. D. the price level to move from P1 to P2, but real Gross Domestic Product (GDP) would stay at Y1.