As of December 2008, the most important category in the CPI is

As more labor is hired, moving along the production function, diminishing returns occur because

A) workers are overworked and so their productivity decreases. B) the wage rate paid is too low and so workers decrease their work effort. C) there are fixed quantities of other resources. D) the real wage rate must increase in order to hire additional workers. E) real GDP increases more rapidly the more workers are hired.

Suppose the price of a bag of frozen chicken nuggets decreases from $6.50 to $5.75 and, as a result, the quantity of bags demanded increases from 600 to 800 . Using the midpoint method, the price elasticity of demand for frozen chicken nuggets in the given price range is

a. 0.35. b. 0.43. c. 2.33. d. 2.89.