If a firm faces perfectly competitive product and factor markets and the marginal product of labor and capital are 4 and 9, respectively, while the wage rate is $2 and the rental rate on capital is $4, the firm should
A. decrease all inputs proportionately.
B. use relatively less capital.
C. use relatively more capital.
D. increase all inputs proportionately.
Answer: C
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The real wage is the wage:
A. measured in current dollars. B. employers are required to pay workers. C. required to maintain a minimum standard of living. D. measured in terms of purchasing power.
In order to fund industrywide advertising, managers of trade associations often try to charge the members that receive a lower marginal benefit from advertising ________.
A) a high fee B) the total cost of the advertising C) nothing D) a lower fee
The Fed buys $20,000 of government securities. The desired reserve ratio is 5 percent and the currency drain ratio is zero. What will be the change in the quantity of money?
A) $400,000 B) $20,000 C) $19,000 D) $5,000 E) $399,980
The euro coins can be spent only in the countries where they are made, because one side of the coin has an image that is individualized for each of the countries of the European Union
a. True b. False Indicate whether the statement is true or false