The hiring rule for a firm that faces a downward sloping demand curve for its output is to hire that amount of labor for which the wage rate is equal to
A. MRPL.
B. the price of the good being sold.
C. VMPL.
D. marginal revenue.
Answer: A
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A higher price reduces the quantity of a product demanded because
A. the purchasing power of individuals increases. B. individuals will buy more of the product and less of its substitutes. C. the financial assets of individuals increase. D. individuals will buy less of the product and more of its substitutes.
Which of the following is true of equilibrium?
A) Equilibrium refers to a situation where an economic agent can be made better off without making anyone else worse off. B) Equilibrium refers to a situation where the government allocates resources among economic agents. C) Equilibrium refers to a situation where all economic agents are making sub-optimal choices and have an incentive to change behavior. D) Equilibrium refers to a situation where all economic agents simultaneously optimize after considering each other's actions.
Suppose we observe a decrease in the equilibrium price of tuna and an increase in the equilibrium quantity of tuna. This is best explained by:
A. a decrease in the cost of fuel used by tuna fishing boats. B. a decrease in the expected future price of tuna. C. an increase in the price of salmon, a substitute for tuna. D. a decrease in the tuna population in the oceans.
Suppose that Alpha's real output rose from $400 billion in year 1 to $428 billion in year 2. Its growth rate for this period was:
A. 14 percent. B. 12 percent. C. 9 percent. D. 7 percent.