A government-imposed price floor in the tobacco market will raise the value of land used to grow tobacco

Use the data in the table above and suppose that labor is the only variable factor of production. If each worker is paid $42.00 per day, what is the average variable cost to Decent Donuts of producing 122 dozen donuts per day?

A) $1.91 B) $2.16 C) $2.41 D) $3.06

If policy makers do nothing in response to a recessionary gap, what will happen?

a. a rapid movement toward lower unemployment and higher inflation b. a rapid movement toward lower unemployment and lower inflation c. a slow movement toward lower unemployment and higher inflation d. a slow movement toward lower unemployment and lower inflation