Market signals
A) are ways of conveying information.
B) are market noise that confuses buyers and sellers.
C) are best ignored by investors.
D) always lead to economic losses.
Answer: A
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The value of marginal product of labor
A) is the change in total product that results from selling one more unit of a good. B) is equal to the price of the good produced multiplied by the marginal product of labor. C) is equal to marginal revenue multiplied by the quantity. D) increases as the amount of labor employed increases.
Betsy graduates from college, where she earned $3,000 a year working part-time, and takes a job as a third grade teacher, where she now earns $30,000 per year. About the same time she received her first paycheck, her bicycle was stolen. With her old income she would have purchased a new bike but with her new income she purchased a new car. Therefore,
a. bicycles are a normal good for Betsy b. automobiles are an inferior good for Betsy c. automobiles are a normal good for Betsy d. Betsy's supply curve for automobiles is upward-sloping e. bicycles and automobiles are complementary goods for Betsy
Suppose that Philip is the best contractor in town, and he makes $400,000 a year. Suppose that Julia Roberts is the best and highest paid actress in Hollywood, and she makes $13 million per movie. Both are the best in their respective fields of work. One reason for the significant difference in incomes has to do with the nature of the service each offers. Philip's contracting services
a. can be provided to an unlimited number of customers in a year, but Julia's work is sold to only a few individuals in a year. b. can only be provided to a limited number of customers in a year, but Julia's work is sold to millions of individuals in a year — i.e., to anyone who has the willingness and ability to pay for admission to her movies. c. can be provided to a unlimited number of customers in a year, and Julia's work is sold to millions of individuals in a year — i.e., to anyone who has the willingness and ability to pay for admission to her movies. d. can only be provided to a limited number of customers in a year, and Julia's work is sold to only a few individuals in a year.
A competitive firm maximizes its profits (or minimizes is losses) by producing the quantity where the market price equals the firm's:
A. marginal cost. B. average total cost. C. average variable cost. D. average fixed cost.