Assume that labor is the only variable input and that an additional input of labor increases total output from 72 to 78 units. If the product sells for $6 per unit in a perfectly competitive market, then the marginal revenue product of this additional worker is:

If labor and capital are underemployed, then an increase in government spending:

A. would have no impact on GDP. B. would increase GDP by exactly the increase in government spending. C. would increase GDP by more than the increase in government spending. D. would increase GDP by less than the increase in government spending

Suppose the MPC in the economy in Figure 10.2 equals 0.75 and the shift from AD0 to AD1 was caused by a decrease in investment of $20 billion. What will the magnitude of the second decrease in aggregate demand be (for example, AD1 to AD2)?

A. $120 billion. B. $80 billion. C. $15 billion. D. $20 billion.