Exhibit 1A-10 Multi-curve graph
Exhibit 1A-10 represents a three-variable relationship. As the annual income of consumers rises from $20,000 (line A) to $40,000 (line B), the result is a:
A. rightward movement along each curve.
B. leftward movement along each curve.
C. leftward shift from curve B to curve A.
D. rightward shift from curve A to curve B.
Answer: D
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Refer to Figure 4-3. At the equilibrium price of P1, consumers are willing to buy Q1 pounds of granola. Is this an economically efficient quantity?
A) Yes, because marginal cost is zero at the price of P1. B) No, the marginal cost of the last unit (Q1 ) exceeds the marginal benefit of the last unit. C) Yes, because P1 is the price where marginal benefit equals marginal cost. D) No, the marginal benefit of the last unit (Q1 ) exceeds the marginal cost of that last unit.
The marginal product of labor
A) is measured by the slope of the production function relating capital to employment. B) is larger when the labor supply is relatively larger. C) is smaller when the labor supply is relatively smaller. D) decreases as the number of workers already employed increases.