As an economy recovers from a recession, the observed level of ...

[berenicecastro]

As an economy recovers from a recession, the observed level of labor productivity tends to decline. Why?
 
  A) The total product remains the same during the recovery, but the number of workers declines.
  B) The total product increases during the recovery, but the number of workers declines.
  C) The marginal product of labor declines as new workers enter the expanding work force.
  D) The marginal product of labor increases at a slower rate than the decline in employment.

Question 2

The snob effect corresponds best to a
 
  A) negative network externality.
  B) Giffen good.
  C) positive network externality.
  D) bandwagon effect.

[aburgess]

Answer to Question 1

C

Answer to Question 2

A