Explain how the equilibrium wage rate is determined for a perfectly competitive industry and how a firm in that industry determines its profit maximizing employment level
What will be an ideal response?
In the above figure, the right-hand figure shows industry's labor market. The market wage is at the intersection of market labor supply and labor demand. The market wage is W, and equilibrium employment by all firms is L1 workers. The wage determines the supply curve that the perfectly competitive firm faces. The firm's demand curve for labor is the marginal revenue product curve, and the firm hires l1 workers.
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Under rate-of-return regulation, natural monopolies must use
A) marginal cost pricing. B) average cost pricing. C) efficient pricing. D) monopoly pricing.
Over the 1980 and 1990s, countries that were given large amounts of aid:
A. experienced growth of 1 percent regardless of the policy in place. B. saw GDP shrink by 1 percent regardless of the policy in place. C. saw GDP shrink by 1 percent even if they had sound policy in place. D. experienced mixed impacts on their GDP growth.
The fact that common stockholders are residual claimants means the stockholders:
A. receive their dividends before any other residuals are paid. B. have a claim against the revenue that remains after everyone else is paid. C. are paid any past due dividends before other claims are paid. D. are paid before the bondholders but after any taxes are paid.
Refer to the diagram. If actual production and consumption occur at Q3,
What will be an ideal response?