The labor demand curve of a purely competitive seller:
A. slopes downward because the firm must lower price to sell more output.
B. slopes downward because labor productivity increases as successive workers are hired.
C. is perfectly elastic because the firm is hiring an insignificant portion of the total labor
supply.
D. slopes downward because the marginal product of successive workers declines.
Answer: D
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The demand schedule assumes that factors other than price:
A. remain the same. B. must also be in the table. C. remain separate in the table. D. change as price changes.
A more elastic demand for a good would generally result from
a. an increase in the supply of that good b. an increase in the number of substitutes for that good c. a decrease in the number of substitutes for that good d. smaller consumer incomes e. a reduction in the number of consumers
If the real interest rate in the economy is i and the expected rate of return on additional investment is r, then other things equal:
A. investment will take place until i and r are equal. B. investment will take place until r exceeds i by the greatest amount. C. r will rise as more investment is undertaken. D. i will fall as more investment is undertaken.
In cities with rent controls, the actual rents paid can be higher than the legal maximum. One explanation for this is
A) rent control laws are so complicated that landlords and tenants may not be aware of what the legal price is. B) landlords are allowed to charge more than the legal maximum on some apartments so long as they charge less on others. C) the legal penalty landlords face for charging more than the legal maximum rent is less than the revenue earned by charging their tenants more than the maximum rent. D) because there is a shortage of apartments, tenants often are willing to pay rents higher than the law allows.