The following graph shows the marginal and average product curves for labor, the firm's only variable input. The monthly wage for labor is $2,800. Fixed cost is $160,000.
When the firm uses 40 units of labor, what is marginal cost at this level of output?
A. $55
B. $70
C. $60
D. $35
E. $280
Answer: D
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Unanticipated inflation occurs when
A) everyone knows perfectly the true rate of inflation. B) the actual inflation rate differs from the anticipated inflation rate. C) the inflation rate is zero. D) there is no change in the purchasing power of money.
A "kinked" demand curve reflects a tendency on the part of an oligopolist to:
a. follow price increases but not price reductions. b. following price reductions but not price increases. c. be unconcerned with rivals' behavior. d. None of these.
The deviation of unemployment from its natural rate is called
a. the economic rate of unemployment. b. cyclical unemployment. c. frictional unemployment. d. structural unemployment.
If we observe that interest rates rise but real investment spending still increases, what must have happened to the function relating investment to the interest rate?
A. It shifted to the left. B. There was a movement up the function relating investment to the interest rate. C. It shifted to the right. D. There was a movement down the function relating investment to the interest rate.