Which of the following is the most accurate definition of a worker's marginal revenue product?
a. The change in the firm's profits as the result of hiring an additional worker.
b. The change in the firm's total revenue as the result of hiring an additional worker.
c. The change in the firm's output as the result of hiring an additional worker.
d. The change in the firm's cost as the result of hiring an additional worker.
QUESTION 2Which of the following best describes marginal cost?
a. The change in total cost when one additional unit of output is produced.
b. Total cost divided by the quantity of output produced.
c. Total variable cost divided by the quantity of output produced.
d. Total fixed cost divided by the quantity of output produced.
e. Costs that do not vary as output varies, and that must be paid even if output is zero.
QUESTION 3The tax cuts passed during the Reagan administration were designed primarily to:
a. boost savings among consumers.
b. shift the aggregate demand curve rightward.
c. reduce the balance-of-payments deficit.
d. increase the supply of productive resources.
e. increase the tax base and include more tax payers.
QUESTION 4The marginal revenue product of a resource:
a. is defined as the marginal product of the resource multiplied by the resource price.
b. simply means that a firm should add to its capital stock as long as competition requires it.
c. equals the extra output produced by an additional unit of the resource multiplied by the price of that output.
d. equals the average product of the resource multiplied by the cost of hiring an additional (marginal) unit of the resource.
QUESTION 5If total cost is 1,000 when output is zero, and total cost is 1,200 when output is one, and total cost is 1,500 when output is two, then which of the following is true?
a. Total fixed cost is 1,500.
b. The marginal cost of producing the first unit of output is 1,200.
c. The marginal cost of producing the second unit of output is 300.
d. The average fixed cost is 750 when two units of output are produced.
QUESTION 6Identify the correct statement.
a. A budget deficit is a flow variable, while debt is a stock variable.
b. A budget deficit is a stock variable, while debt is a flow variable.
c. A budget deficit and debt are both stock variables.
d. The budget deficit decreases when aggregate demand decreases.
e. Debt increases when the budget deficit decreases.
QUESTION 7If a product's price increases, then its:
a. MP will increase.
b. MFC will increase.
c. MRP will increase.
d. MP will decrease.
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