Labor productivity is computed as
A. per capita real GDP divided by the number of workers.
B. real GDP divided by the number of workers.
C. real GDP divided by population.
D. per capita real GDP divided by population.
Answer: B
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A comic book company pays an annual licensing fee of $10,000 for the rights to an artist's character. Which would have the bigger effect on the readers of that character's comic: an increase in printing costs or an increase in the artist's licensing fee? Explain.
What will be an ideal response?
In a perfectly competitive market, the market clearing price:
A) is always equal to the equilibrium price. B) is unrelated to the equilibrium price. C) is always lower than the equilibrium price. D) is always higher than the equilibrium price.
For a single-price monopolist that is maximizing profit, the price is
A) less than marginal revenue. B) equal to marginal revenue. C) equal to marginal cost. D) greater than marginal cost.
One reason patent protection is vitally important to pharmaceutical firms is
A) successful new drugs are not profitable. If firms are not granted patents many would go out of business and health care would be severely diminished. B) the approval process for new drugs through the Food and Drug Administration can take more than 10 years and is very costly. Patents enable firms to recover costs incurred during this process. C) the high salaries pharmaceutical firms pay to scientists and doctors make their labor costs higher than for any other business. Profits from patents are needed to pay these labor costs. D) that taxes on profits from drugs are very high; profits from patent protection enable firms to pay these taxes.