An economy in which output has decreased and prices have increased would suggest that there has been a:
A. negative demand side shock.
B. negative supply side shock.
C. positive demand side shock.
D. positive supply side shock.
Answer: B
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Government health and safety regulations or anti-discrimination laws can reduce real wages by:
A. decreasing the supply of labor. B. increasing worker productivity. C. reducing employer costs. D. decreasing the demand for labor.
In the long run, entry and exit in a perfectly competitive market will drive the price to the point where the: a. marginal cost curve intersects the average total cost curve at its minimum
b. marginal cost curve intersects the marginal revenue curve. c. marginal cost curve intersects the average variable cost curve at the shutdown point. d. marginal cost curve intersects the market demand curve.
The rate at which one input can be exchanged for another without altering output is called
A. the marginal rate of technical substitution. B. the slope of the total product curve. C. the law of diminishing returns of labor. D. the slope of the marginal product of labor.
A firm finds that it must increase wages to attract extra workers. The firm will hire labor up to the point where the marginal:
A. Product of labor equals the wage rate B. Revenue product of labor is greater than the wage rate C. Revenue product of labor starts to decline D. Revenue product equals the additional cost of hiring an extra worker