Suppose the wage rate is $5, and the marginal revenue product (MRP) of the seventh worker at a yo-yo factory is also equal to $5. The labor market was originally purely competitive, but is then monopsonized without changing the MRP of the seventh worker. That means:
A. More workers will be hired but they will be paid lower wages
B. More workers will be hired and they will be paid higher wages
C. Fewer workers will be hired and they will be paid lower wages
D. Fewer workers will be hired and they will be paid higher wages
C. Fewer workers will be hired and they will be paid lower wages
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A factor-price effect occurs when increases in the industry's output
a. attract new firms to the industry. b. raise the cost of a variable input. c. cause new subindustries to be developed. d. result in lower prices for consumers.
By definition, an inferior good is a
A) want that is not expressed by demand. B) normal substitute good. C) good for which demand decreases when its price rises. D) good for which demand decreases when income increases.
The above table shows production points on Sweet-Tooth Land's production possibilities frontier. Which of the following is an example of a point that is inefficient?
A) 0 chocolate bars and 100 cans of cola B) 20 chocolate bars and 80 cans of cola C) 32 chocolate bars and 40 cans of cola D) 38 chocolate bars and 0 cans of cola
Which of the following transactions would not be included in the current account of the home country?
A) A consumer good is imported into the home country. B) A home country resident makes a deposit in a foreign bank. C) A foreign student pays tuition to a university in the home country. D) A home country resident receives income on his or her foreign assets.