The global financial panic in September 2008 that led to a sharp fall in business investment spending and consumer spending can be viewed as:
a. a sharp decrease in aggregate supply.
b. a sharp decrease in aggregate demand.
c. a sharp decrease in both aggregate supply and aggregate demand.
d. a modest increase in aggregate supply.
e. a modest increase in both aggregate demand and aggregate supply.
QUESTION 2Harold Brown runs a company that sells encyclopedia sets for 250 each. When he employs 10 workers, they can sell 60 sets per week, while only 54 sets are sold when 9 workers are employed. What is the weekly marginal revenue product of the tenth worker?
a. 250.
b. 1,250.
c. 1,500.
d. 15,000.
QUESTION 3When the curve that envelops the series of possible short-run average total cost curves is horizontal, this means that there are:
a. economies of scale.
b. diseconomies of scale.
c. constant returns to scale.
d. diminishing returns.
e. some fixed factors of production.
QUESTION 4In the history of the U.S. economy, which economic era saw both high unemployment and high inflation at the same time?
a. After the Great Depression to the early 1970s
b. Since the early 1980s
c. The colonial period
d. Before and during the Great Depression
e. From the early 1970s to the early 1980s
QUESTION 5The marginal revenue product of a resource is:
a. the marginal product of the resource multiplied by the price of the product it helps to produce.
b. the price of the product times the price of the resource.
c. larger when the product price is smaller.
d. larger when the marginal product is smaller.
QUESTION 6Each potential short-run average total cost curve is tangent to the long-run average cost curve at:
a. the level of output that minimizes short-run average total cost.
b. the minimum point of the average total cost curve.
c. the minimum point of the long-run average cost curve.
d. a single point on the short-run average total cost curve.
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