The credits for a principles of economics section is three units, and an instructor teaches two sections with 100 students in each, and tuition and fees at your university are $100 per unit. If the instructor is paid $20,000 to teach both classes, should the university hire the instructor?
A. Yes, the MRP of the instructor is higher than the wage.
B. Yes, the wage is higher than the instructor's MRP.
C. Yes, the wage of the instructor is higher than the MRP.
D. No, the wage is higher than the instructor's MRP.
Answer: A
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Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is Qd = 20,000 - 200P where P is the price of a cubic yard of concrete and Qd is the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard. Suppose Kate enters the market first and chooses her output before Alice. Given market demand, what is the market price per cubic yard?
A. $80 B. $85 C. $90 D. $95
Identify a valid trend observed in U.S. business cycles since 1933. a. Contractions lasted for more than two years on an average. b. There were only two or three complete cycles
c. There was no recession since 1979. d. Expansions generally lasted longer than contractions. e. Each cycle lasted longer than the previous one.
Critics of the Federal Reserve maintain that, to correct the credibility problem of monetary policy, the Fed should:
a. tighten monetary policy. b. be required to maintain a growth rate of the money supply that is fixed by law. c. give more power to the Federal Open Market Committee. d. ignore public opinion and establish more discretionary power over monetary policy. e. merge with the U.S. Treasury and be dissolved as an independent agency.
You have just bought a used car and drive away satisfied that you’ve made a good deal on the purchase. What would an economist say about your “gain” on the deal?
A. Your gain has clearly meant that the seller lost on the deal. B. The seller has clearly gained, and you have actually lost on the deal. C. Both you and the seller have gained something. D. If your gain is too large, then the deal should be renegotiated. E. If the seller’s loss is too large, then the deal should be renegotiated.