A monopsonist hires labor in a market with perfectly competitive supply. Whenever she hires an additional worker,
A. she must reduce the wage paid to all workers already hired.
B. she will not change the wage paid to all workers already hired.
C. she must raise the wage paid to all workers already hired.
D. she may or may not choose to change the wage paid to all workers already hired.
Answer: C
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Elijah, a basketball fan, reasons that because his favorite team has three superstars on it, the team must be a great team and will win the championship. Elijah is committint the
a. fallacy of composition b. fallacy that association is causation c. fallacy of segmentation d. mistake of ignoring secondary effects e. mistake of ignoring the obvious
Compared to other investments such as bonds, historically a diverse set of stocks held over a lengthy time period (for example, 30 or 40 years) has yielded a
a. low average real rate of return, and the variation in that return has been extremely high. b. high average real rate of return, and the variation in that return has been relatively small. c. low average real rate of return, and the variation in that return has been relatively small. d. high average real rate of return, and the variation in that return has been extremely high.
The market supply curve for any particular category of labor is
A. steeper than the horizontal summation of the VMPL curves for that category of labor. B. equal to the horizontal summation of the VMPL curves for that category of labor. C. likely to be backward-bending. D. likely to be upward sloping.
Economic growth is an exponential process. What does this mean?
A. It means that the returns to huge capital investments made today will diminish at an increasing rate over time. B. It means that small differences in sustained growth rates have significant effects on a nation's real income over long periods of time. C. It means that countries must allocate increasing amounts of resources to capital goods to see constant increases in the growth rate of potential output. D. It means that if a country allocates a fixed amount of resources to capital goods, its potential output will increase at an increasing rate over long periods of time.