Average labor productivity is the
A) amount of workers per machine.
B) amount of machines per worker.
C) ratio of employed to unemployed workers.
D) amount of output per worker.
D
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In the view of the new classical economists, an increase in the money stock will affect real output and employment only if the increase in the money stock
a. was caused by an aggregate supply shock. b. is accompanied by an expansionary fiscal policy shift. c. was anticipated. d. was unanticipated.
Use the following information to answer the next question. Harvey quit his job at State University where he earned $45,000 a year. He figures his entrepreneurial talent or foregone entrepreneurial income to be $5,000 a year. To start the business, he cashed in $100,000 in bonds that earned 10% interest annually to buy a software company, Extreme Gaming. In the first year, the firm sold 11,000 units of software at $75 each. Of the $75, $55 goes for the costs of production, packaging, marketing, employee wages and benefits, and rent on a building. What is the economic profit generated by Extreme Gaming in the first year?
A. $160,000 B. $280,000 C. $220,000 D. $155,000