A wheat farmer sells wheat in a perfectly competitive market and hires labor in a perfectly competitive market. The market price of wheat is $2 a bushel, the wage rate is $10, the farmer employs five workers and the marginal product of the fifth worker is 10 bushels. What would you advise this farmer to do?
A. Do nothing because the wage rate and the marginal product of the last worker hired are equal.
B. Increase employment because the wage paid is less than the marginal revenue product.
C. Reduce the product price so that the wage and marginal revenue product will be equal.
D. Reduce employment because the wage paid is less than the marginal revenue product.
Answer: B
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Which of these is one of the major reasons for rapid increases in health care spending in the United States?
A. A decrease in the number of malpractices among doctors. B. Advances in medical technology and new prescription drugs are higher cost. C. There are high rates of labor productivity growth in health care.
Refer to Scenario 11.1. Suppose Mariana purchases the needed land from Abe, Ben, Cat, and Don for the value she calculated the land to be worth, but Eva refuses to sell the land for the same price as the other 4 ranchers
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Which of the following is not an argument in favor of inward-oriented strategies?
a. A newly developing economy needs protection from foreign competition. b. Government restrictions are necessary to maximize the rate of economic growth. c. Deteriorating prices of primary products in relation to manufactured goods expose developing countries to increasingly unfavorable terms of trade. d. Developing countries should compete on the basis of comparative advantage. e. Economic growth requires rapid industrialization and a shift away from primary products.
Using the above table, diminishing marginal utility begins after the ________ glass of water is consumed.
A. 6th B. 5th C. 1st D. 2nd