An individual firm in a competitive labor market faces a(n):
a. horizontal labor supply curve.
b. backward-bending labor supply curve.
c. downward-sloping labor supply curve.
d. upward-sloping labor supply curve.
e. vertical labor supply curve.
QUESTION 2The introduction of a tax by the government will:
a. have no effect on real GDP since real GDP comprises consumption expenditure, investment expenditure, and government expenditure.
b. affect consumption through a change in disposable income.
c. affect consumption through its effect on investment.
d. affect government spending since the government levies the tax.
e. increase real GDP since it enables the government to increase spending.
QUESTION 3The vertical distance between the average total cost curve and the average variable cost curve at any given output level equals average fixed cost at that particular output level.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 4Which of the following is true of an intermediate good?
a. It is of no value to the seller.
b. It is of no value to the buyer.
c. It is purchased for household production.
d. It helps produce another good.
e. It is sold at a discounted price by firms.
QUESTION 5If the wage rate is fixed at a certain level, the:
a. total wage cost curve is horizontal.
b. total wage cost curve is a straight upward sloping line.
c. MP must be constant.
d. total wage cost curve will increase at an increasing rate.
e. total wage cost curve will increase at a decreasing rate.
QUESTION 6A tax is considered to be independent of:
a. investment.
b. consumption.
c. government spending.
d. real GDP.
e. the price level.
QUESTION 7A firm's average fixed cost curve can never be U-shaped, even if its other average cost curves are U-shaped.
a. True
b. False
Indicate whether the statement is true or false
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