Chapter 29 Quiz

Chapter 29 Quiz - 1. Answer the next question(s) on the...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Answer the next question(s) on the basis of the following information: An economy is employing 2 units of capital, 5 units of raw materials, and 8 units of labor to produce its total output of 640 units. Each unit of capital costs $10, each unit of raw materials, $4, and each unit of labor, $3. Refer to the above information. If the per unit price of raw materials rises from $4 to $8 and all else remains constant, the per-unit cost of production will rise by about: A) 100 percent. B) 50 percent. C) 40 percent. D) 30 percent. 2. When aggregate demand declines, the price level may remain constant, at lease for a time, because: A) firms individually may fear that their price cut may set off a price war. B) menu costs rise. C) price cuts tend to increase efficiency wages. D) product markets are highly competitive. 3. Refer to the above diagrams, in which AD 1 and AS 1 are the "before" curves and AD 2 and AS 2 are the "after" curves. Other things equal, an increase in investment spending is depicted by: A) panel (A) only. B) panel (B) only.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 02/10/2010 for the course ECON 201 taught by Professor Smith during the Spring '10 term at Bowling Green.

Page1 / 4

Chapter 29 Quiz - 1. Answer the next question(s) on the...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online