Assume that labor is the only variable input and that the payment made to labor is denoted as W. The ________ can be stated as W/MC.
A. marginal product of labor
B. total cost of labor
C. total revenue from labor
D. marginal revenue product of labor
Answer: A
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Suppose the current price of a pound of steak is $6 per pound and the equilibrium price is $9 per pound. What takes place?
A) There is a shortage, so the price rises and quantity demanded increases. B) There is a shortage, so the price falls and quantity demanded increases. C) There is a surplus, so the price falls and quantity demanded increases. D) There is a shortage, so the price falls and quantity demanded decreases. E) There is a shortage, so the price rises and quantity demanded decreases.
Tom is a castaway who washes up on a remote island. He can kill eight birds per hour or catch ten fish per day. The natives on the island can kill ten birds per day or catch twenty fish per day. Tom has a comparative advantage in: a. hunting birds
b. fishing. c. both hunting birds and fishing d. neither hunting birds or fishing.
Which of the following is true of the demand curve for a normal good? a. The shape of the individual demand curve for a normal good is necessarily linear
b. The slope of the individual demand curve for a normal good is necessarily positive. c. The shape of the individual demand curve for a normal good can either be linear or non-linear. d. The slope of the individual demand curve for a normal good can either be positive or negative.
According to Keynesian analysis, if government expenditures and taxes are increased by the same amount, which of the following will occur?
A) Aggregate supply will decrease B) Aggregate supply will increase C) Aggregate demand will be unaffected D) Aggregate demand will decrease E) Aggregate demand will increase