Figure 10.1 depicts a firm's marginal revenue product curve. If the firm maximizes its profit and the hourly wage is $12, how many hours of labor will the firm demand?
A. smaller than 30 hours
B. between 30 hours and 40 hours
C. between 40 hours and 50 hours
D. greater than 50 hours
Answer: C
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What is the difference between the present value of $550 to be received after 3 years and after 5 years from now at an annual interest of 15 percent?
a. $73.49 b. $61.60 c. $250.02 d. $88.11
Which of the following statements describes the most likely effect of cutting taxes?
a. Cutting taxes would effectively raise the hourly wage, so it would encourage people to work more. b. Cutting taxes would effectively lower the hourly wage, so it would require people to work more to maintain their standard of living. c. People work either 20 hours or 40 hours per week, regardless of hourly wage, so cutting taxes would have no effect. d. Some people might work more hours, but others will not or will not be able to.
A situation in which output decreases while prices increase is often referred to as:
A. inflation. B. negative economic growth. C. a recession. D. stagflation.
When the dollar price of a British pound is $0.75, it is correct to state that an American traveling in England will receive ________ pounds per dollar.
A. 1.33 B. 0.75 C. 75 D. 1.25