Based on the above figure, for which of the following levels of output at Ike's Ice Cream Kitchen does the marginal product of labor exceed the average product of labor?
A) at 10 gallons
B) at 40 gallons
C) at 70 gallons
D) all of the above
A
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Demand for a product tends to be more elastic the longer the time period considered because
A) sellers have more time to expand production. B) buyers have more time to search for substitutes. C) price increases over time make the price larger relative to buyers' incomes. D) the inverse relationship between the price and the quantity demanded weakens over time. E) buyers get used to the new price.
In the above figure, a decrease in the expected profit will result in a movement from point E to
A) point F. B) point G. C) point H. D) point I.
Money demand is given by Md/P = 1000 + .2Y - 1000i. Given that P = 200, Y = 2000, and i = .10, real money demand is equal to
A) 1300. B) 1500. C) 260,000. D) 300,000.
Raising taxes as an element of discretionary fiscal policy is intended to reduce aggregate demand, but it can also reduce aggregate supply if
a. the higher taxes lead workers to seek out a second job. b. the higher taxes cause workers to work less. c. the government purchases goods with the additional revenue. d. the government uses the additional revenue to retire some of the federal debt. e. the higher taxes cause people to save less.