Mike has just been laid off from his construction job because consumers are not purchasing new homes because of the recession. Mike would be considered to be part of

Suppose the economy is in long-run equilibrium. If the government decreases its expenditures, eventually the decrease in aggregate demand causes price expectations to

a) fall. This fall in price expectations shifts the short-run aggregate-supply curve to the right. b) fall. This fall in price expectations shifts the short-run aggregate-supply curve to the left. c) rise. This rise in price expectations shifts the short-run aggregate-supply curve to the right. d) rise. This rise in price expectations shifts the short-run aggregate-supply curve to the left.

The market price of physical capital is $10 and the market wage rate is $5. If a firm is optimally hiring an additional unit of physical capital, the value of the marginal product of physical capital is:

A) $1. B) $2. C) $10. D) $50.