Refer to Figure 15-14. In the figure above, suppose the economy in Year 1 is at point A and is expected in Year 2 to be at point B. Which of the following policies could the Federal Reserve use to move the economy to point C?

As the result of a decrease in capital, the demand for labor would ________, the supply of labor would ________, and the real wage would ________

A) decrease; decrease; decrease B) decrease; remain the same; increase C) decrease; remain the same; decrease D) decrease; increase; remain the same

Economies of scale can be caused by all of the following except:

a. price discounts for large scale purchases. b. labor specialization. c. use of more productive equipment. d. increases in the firm's average total cost. e. more cost-efficient methods of marketing.