A firm can produce 450 gallons of milk per day with 4 workers and 500 gallons per day with 5 workers. The marginal product of the fifth worker expressed in gallons per worker per day, is:
a. 35.
b. 50.
c. 70.
d. 350.
QUESTION 2The demand for _____ is most severely affected by a recession.
a. medicines
b. automobiles
c. breakfast cereals
d. haircuts
e. gasoline
QUESTION 3As a result of a kinked demand curve, the price:
a. fluctuates.
b. falls below the kink.
c. settles at the kink.
d. rises above the kink.
QUESTION 4If two workers can produce 22 units of output, and the addition of a third worker increases output to 30 units, the marginal product of the third worker is:
a. 8 units.
b. 10 units.
c. 22 units.
d. 30 units.
QUESTION 5Which of the following would indicate the beginning of a recessionary phase in an economy?
a. Many new firms starting up
b. Stock prices improving
c. Businesses slowing down
d. Demand for real estate picking up
e. Orders for new equipment increasing
QUESTION 6A kink in the demand curve facing an oligopolist is caused by:
a. rapidly rising marginal revenues.
b. excessive advertising.
c. the belief that competitors will follow price increases but not match price decreases.
d. the tendency of competitors to follow price reductions but not price increases.
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