Suppose the marginal physical product of labor at a shoe string factory is 1,500 shoestrings per hour at 80 hours, 1,200 per hour shoestrings at 90 hours, 800 shoestrings per at 100 hours, and 300 shoestrings per hour at 110 hours. If a shoestring maker’s wages are $60 per hour and each string sells for $0.05. What is the optimal use of labor for making shoestrings?

Vaccination against a disease helps in preventing the spread of the disease. Which of the following can help in increasing the number of people vaccinated to the socially optimal level?

A) A corrective tax B) An income tax C) A life insurance D) A health tax

In the classical model, a rightward shift in the aggregate demand curve will, in the long run,

A) increase real GDP and the price level. B) increase real GDP and will not change the price level. C) decrease real GDP and will not change the price level. D) not change real GDP and will increase the price level.