Which of the following is true about classical economists?
a. They argued that the sources of depressions and high unemployment lay within the market system.
b. They advocated laissez-faire policies to promote economic growth.
c. They believed the economy would naturally tend toward unemployment.
d. They believed prices and wages were rigid.
e. They encouraged government intervention in markets.
QUESTION 2If a firm hires labor for 8,000, pays rent of 4,000, buys raw materials for 13,000 from another firm, earns profits of 1,200, and sells its output for 31,000, the value added by the firm is _____.
a. 4,800
b. 10,000
c. 18,000
d. 25,000
e. 26,200
QUESTION 3If the MRP of labor decreases, labor:
a. demand will decrease.
b. demand will increase.
c. supply will increase.
d. supply will decrease.
e. demand and supply will be unaffected.
QUESTION 4Who argued that the economy should be left to itself to close a recessionary gap?
a. John F. Kennedy
b. John Maynard Keynes
c. Mercantilists
d. Classical economists
e. Socialists
QUESTION 5Katrina pays 40 for a meal at a fancy restaurant. The ingredients used cost 10 . The value added by the restaurant is _____.
a. 30
b. 40
c. 70
d. 40 plus the wages paid to the chef and waiters
e. 40 plus the profit earned by the restaurant owner
QUESTION 6If cats become a more popular pet in the United States than dogs, what can we expect to happen to the market for cat food workers?
a. MP increases.
b. MRP increases.
c. MP decreases.
d. MRP decreases.
e. Wage decreases.
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