Using Figure 48.1, modeling the attacks of September 11, 2001, you would 
Figure 48.1
A. use Panel 1 only with a shift from ADB to ADA.
B. use Panel 2 only with a shift from ASA to ASB.
C. use Panel 1 only with a shift from ADA to ADB.
D. use Panel 1 to model the aggregate demand shock (ADB to ADA) and Panel 2 to model the aggregate supply shock (ASB to ASA).
Answer: D
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When more workers are hired, the firm's output expands at an increasing rate only
a. when the law of diminishing returns is operative b. under conditions of noncompeting labor markets c. if each worker's MPP is positive d. when technology is improved e. when the gains from specialization of labor outweigh all other factors affecting labor productivity
When a firm can hire all the labor it wants at the competitive market wage, the marginal labor cost is equal to the
a. price of the output b. total cost of labor c. marginal physical product of labor d. wage rate e. change in labor employed