-As a Result of the Rightward Shift in the Demand

question 307

Multiple Choice

-As a result of the rightward shift in the demand curve for labor from LD₀ to LD₁, the equilibrium level of employment ________ and potential GDP ________.

• A) increases; increases
• B) increases; decreases
• C) decreases; increases
• D) decreases; decreases

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Definitions:

Average Product

The average amount produced by each unit of a variable factor of production.

Marginal Product

The additional output that is produced by adding one more unit of a specific input, ceteris paribus.

Average Product

The output produced per unit of input used; calculated by dividing the total product by the quantity of inputs.

Yards Raked

The total area of yards cleared of leaves or debris, serving as an indicator of performed maintenance or service activity.