As more output is produced, the marginal product of labor declines
A) because of the law of diminishing returns. B) because the firm's marginal revenue declines.
C) if the firm's output supply curve is inelastic. D) if firms reduce the wage paid to labor.
A
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Investment banks in the U.S. are
A) regular banks specializing in investment projects. B) not banks at all but institutions which specialize in underwriting sales of stocks and bonds. C) special arm of the U.S. government for U.S. banks operating outside the U.S. D) regular banks specializing in investment projects, but allowed to offer limited domestic transactions. E) international banks that are heavily invest in the U.S.
A public policy that would lower everyone's income but would lower the income of the rich faster than that of the poor would further the goal of _____
a. improving the lot of those worse off b. social justice c. income equality d. Pareto optimality
In the context of insurance, moral hazard refers to:
A. when risks are shared across many different assets or people, reducing the impact of any particular risk on any one individual. B. the tendency for high-risk individuals to seek out more insurance than low-risk individuals. C. when people organize themselves in a group to collectively absorb the cost of the risk faced by each individual. D. the tendency for people to behave in a riskier way after they have acquired insurance.
The supplier of a factor of production has a reservation price of $100. The purchaser of the factor of production has a reservation price of $200. If the factor of production is unique, then:
A. a transaction will occur, and the price paid for the factor of production will be $200. B. a transaction will occur, and the price paid for the factor of production will be $100. C. a transaction will occur, and the price paid for the factor of production will be $150. D. there will be no transaction since $200 is greater than $100.