1) Your bagel shop uses both capital and labor in the production of bagels. In this production process capital and labor are complements. You install a new oven and the marginal product of capital increases. As a result

A) the rental rate of capital falls

B) labor becomes more productive

C) labor becomes less productive

D) the wage falls

2) Which of the following would be considered a public good?

A) education

B) a slice of pizza

C) an iPod

D) a fireworks display

3) Informative advertising

A) is designed to change a consumer's preferences and is usually associated with search goods.

B) is designed to change a consumer's preferences and is usually associated with experience goods.

C) is designed to describe a product's characteristics and is usually associated with search goods.

D) is designed to describe a product's characteristics and is usually associated with experience goods.

4) Diseconomies of scale occur

A) when long run ATC is constant as output is varied.

B) when long run ATC decreases as output expands.

C) when short run ATC decreases as output expands.

D) when long run ATC increases as output expands.