Comment on the following statement: "As the market wage rises, the firm is likely to hireless labor."
What will be an ideal response?
The statement is true. The firm compares the wage with the marginal revenue product to determine the optimal level of labor to hire. Because of diminishing returns, marginal revenue product falls as more workers are hired. (This implies that marginal revenue product rises as fewer workers are hired.) Thus, as the wage rises, the firm will lower its level of labor used.
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Refer to Table 19-12. Consider the following data on nominal GDP and real GDP (values are in billions of dollars): The base year used in calculating real GDP is
A) 2013. B) 2014. C) 2015. D) 2016.
An economy's PPC illustrates the extent to which the economy consumes what it produces
a. True b. False Indicate whether the statement is true or false
Kachina is a senior majoring in graphic design at Awesome University (AU). While she has been attending college, Kachina started a computer consulting business to help senior citizens learn how to use their iPads. Kachina charges $25 per hour for her consulting services. She also works 5 hours a week for the Economics Department to maintain that department's Web page. The Economics Department
pays Kachina $20 per hour. If Kachina can work additional hours at either job, what is the opportunity cost if she spends one hour reading a novel? a. $20 b. $25 c. $100 d. $125
Firms are making profits in a decreasing-cost industry. Which of the following statements describes what will happen in the long run?
A. More firms will enter this industry, causing the industry supply schedule to shift to the right and the LRAC curve facing firms to shift down. B. Firms will exit this industry, causing the industry supply schedule to shift to the left and the LRAC curve to shift down. C. More firms will enter this industry, causing the industry supply schedule to shift to the right and the LRAC curve facing firms to shift up. D. Firms will exit this industry, causing the industry supply schedule to shift to the right and the LRAC curve to shift down.