A profit-maximizing firm should continue to hire workers until the MRP has declined to the level of the market wage rate in a competitive labor market.
Answer the following statement true (T) or false (F)
True
Until MRP is equal to the market wage, a firm can gain profit by hiring a worker whose added value (MRP) is greater than the added cost (market wage).
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Suppose Joe can prepare 20 sandwiches or 10 pizzas in an hour and Beth can produce 36 sandwiches or 27 pizzas. The concept of comparative advantage concludes that
A) Beth should produce both goods because she can produce more of both goods in an hour than can Joe. B) Beth should produce sandwiches and Joe should produce pizza. C) Beth should produce pizza and Joe should produce sandwiches. D) Beth should produce both goods and Joe should produce sandwiches.
The only difference between adaptive and rational expectations is that the theory of adaptive expectations assumes economic agents to be irrational
a. True b. False Indicate whether the statement is true or false
A monopolistic competitor maximizes profit by producing 600 units of output at a price of $24 per unit. If the average cost of production is $18, the monopolistic competitor earns a profit of:
a. $3,600. b. $2,400. c. $6,000. d. $1,800.
If you were going to expand a facility by adding 10% more seats, but because of the location of those seats the costs of providing ushers and other personnel to deal with the new seats was rising (on a per seat basis), the new MC curve would look like the previous one, except that it would
A. no longer be a backward L but would be upward sloping once the old capacity was reached. B. just shift up. C. just shift to the right. D. just shift to the left.