A firm's marginal product curve slopes downward throughout its length.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 2Which of the following would be included in this year's gross domestic product (GDP)?
a. One hundred shares of IBM stock that Tony sold this May
b. A used car that Tracey sold to Justin
c. George's purchase of a fishing rod and reel at a garage sale
d. Sharon giving Dennis 20 as a reward for finding her ring
e. A bucket of Kentucky Fried Chicken that Kate bought this July
QUESTION 3A union may attempt to obtain stricter certification requirements or longer apprenticeships. These changes would raise workers' wages because they:
a. create unnecessary unemployment.
b. shift in labor supply curve leftward.
c. decrease the marginal product of labor.
d. reduce management's use of featherbedding.
QUESTION 4Which of the following statements best explains the effects of transfer payments and taxes on aggregate spending?
a. Transfer payments and taxes affect aggregate spending directly, just as consumption does.
b. Transfer payments and taxes affect aggregate spending indirectly by first changing disposable income and thereby changing consumption.
c. Changes in the amount of transfer payments and taxes cancel each other and therefore have no influence on any economic variable.
d. Transfer payments and taxes affect disposable income but have no effect on consumption.
e. Transfer payments affect disposable income, but taxes do not.
QUESTION 5In the long run, all costs are considered variable.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 6Which of the following is not true about gross domestic product (GDP)?
a. It includes only final goods and services.
b. It reflects production in a particular year.
c. Intermediate goods and services are excluded to prevent double counting.
d. It excludes purchases of financial assets.
e. It includes transfer payments.
QUESTION 7Which of the following statements concerning the supply of labor is true?
a. The wage rate has no effect on the supply of labor.
b. The labor supply curve is downward sloping.
c. The supply of labor is determined by the prevailing wage rate.
d. The typical labor supply curve is upward sloping.
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