Figure 17.1 depicts a firm's marginal revenue product curve. If the prevailing hourly wage increases:
A. the marginal revenue product curve shifts upward.
B. the marginal revenue product curve shifts downward.
C. the marginal revenue product curve does not shift, but there is a movement upward along the curve.
D. the marginal revenue product curve does not shift, but there is a movement downward along the curve.
Answer: C
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A) above; surplus B) below; surplus C) above; shortage D) below; shortage
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A) negatively; negatively B) negatively; positively C) positively; negatively D) positively; positively
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Which of the following is a public good?
a. An economics lecture. b. A television set. c. Higher education. d. Housing. e. Clean air