1) If a firm hires another worker and the marginal product of labor is negative, we know that the firm's total output is

1. decreasing.
2. unchanged.
3. increasing.
4. zero.
5. equal to the marginal product of that worker.

2) Vanessa owns a restaurant. Her total costs are $600,000, and her fixed costs are $210,000. The quantity of output = 100. Her ATC = ____________, and AVC = ___________

1. $6,000; $2,100
2. $6,000; $3,900
3. $8,100; $3,900
4. $8,100; $2,100

3) Suppose the rent that a company pays increases. In terms of the cost equations, which of the following is true in short run?

1. TC will increase, but ATC will decrease.
2. TVC will increase, but AVC will decrease.
3. The MC curve will not be affected.
4. The TFC and AFC will not change.

4) The local government tells grocery stores that they are not allowed to change the price of bottled water for three weeks during hurricane season. Demand for bottled water increases during hurricane season. What will be the consequence?

1. Grocery stores will be unable to sell all the bottled water they want at the temporary price ceiling price.
2. Consumers will be unable to buy all the bottled water they want at the temporary price ceiling price.
3. The supply curve for bottled water will increase and shift to the right.
4. The demand curve for bottled water will decrease and shift to the left.