A bracelet making company has three employees, and together they produce 10 bracelets an hour. When a fourth worker joins them, the output for the company is now 11 bracelets an hour. Which of the following is true?
A. Diminishing marginal product started with the fourth worker.
B. Average product has increased.
C. Total product is increasing.
D. None of these is true.
C. Total product is increasing.
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In the figure above, the curve is known as the
A) production possibilities frontier. B) substitution options frontier. C) production function. D) opportunity cost curve.
The Phillips curve represents a relationship between:
A. inflation and real income. B. inflation and unemployment. C. money supply and interest rates. D. money supply and unemployment.
Suppose Michael is willing to drive across town to save 40 percent on a sweatshirt with a list price of $80. If Michael is rational, this implies that he should
A. not be willing to drive across town to save 40 percent on a microwave with a list price of $200. B. be willing to drive across town to save 40 percent on a book with a list price of $30. C. not be willing to drive across town to save $35 on a shirt with a list price of $70. D. be willing to drive across town to save 10 percent on a guitar with a list price of $320.
Which of the following might you believe if you say that "it's no one's fault" that the United States runs a trade deficit?
A. The United States is a successful rich economy that can afford a lot of imports. B. Other countries have used nontariff barriers to keep out U.S. exports. C. U.S. manufacturers are incompetent and unable to compete with foreign producers. D. American consumers borrow too much to buy imported goods like cars and electronics.