When the representative firm maximizes profits,
A) it sells as much as possible.
B) the wage equals average labor productivity.
C) the wage equals marginal labor productivity.
D) business taxes must be zero.
C
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Which of the following statements is true?
A) Defending an overvalued currency is easier than defending an undervalued currency. B) Defending an undervalued currency is easier in the short run than in the long run. C) The nominal exchange rate is the ratio of the same basket of goods in two countries. D) The real exchange rate is calculated by dividing the nominal exchange rate by the inflation rate.
A monopolistically competitive firm is like a perfectly competitive firm insofar as
A) both face perfectly elastic demand. B) both make an economic profit in the long run. C) both have MR curves that lie below their demand curves. D) both make zero economic profit in the long run.
Suppose a person's utility for leisure (L) and consumption (Y) can be expressed as U = Y + L0.5. Show what happens to the person's labor supply curve when the income tax is cut from 70 % to 30 %. Denote hours worked as H and wage per hour as w
What will be an ideal response?
If people attempt to sell bonds because of excess money demand, then the interest rate will:
a. rise. b. fall. c. remain unchanged d. react unpredictably.