Refer to the Accompanying Diagram to Answer the Following

question 147

Multiple Choice

Refer to the accompanying diagram to answer the following questions.

-If consumers expect the price of a good to decrease in the future and all else is held constant,we would assume that the demand curve would

• A) shift from D₁ to D₃.
• B) remain at D₁.
• C) shift from D₁ to D₂.
• D) shift from D₂ to D₁.
• E) shift from D₂ to D₃.

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Definitions:

Marginal Product of Labor

The additional output a firm gains by employing one more unit of labor, holding other inputs constant.

Variable Input

An input whose quantity can be changed in the short run to increase or decrease production.

Average Product of Labor

The output produced per unit of labor input, calculated by dividing total output by the total number of labor units used.

Variable Input

A production factor that can be adjusted in the short term to change the level of output, such as labor or raw materials.