A competitive employer should hire additional labor as long as
A. the MRP exceeds the wage rate.
B. average product exceeds MP.
C. the wage rate is less than MP.
D. MC exceeds MR.
Answer: A
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The Capital Asset Pricing Model determines the weighted average cost of capital
Indicate whether the statement is true or false
Which of the following is an example of a good with a highly elastic supply curve?
a. luxury goods b. tropical vacations c. pizza d. sports vehicles
Diminishing marginal product occurs when
a. the marginal product of an input increases as the quantity of the input increases. b. the marginal product of an input decreases as the quantity of the input increases. c. total output increases as the quantity of an input increases. d. total output decreases as the quantity of an input increases.
When incomes fail and the qualities of steak purchased change, economists make the ceteris paribus assumption because: (check all that apply)
a. the assumption is important in distinguishing between macroeconomics and microeconomics. b. economists would otherwise be confused by the effects of changes of other variables on the quantity of steak purchased. c. income is the most important factor that influences the quantity of steak purchased. d. economists are able to account for all of the variables that impact the quantity of steak purchased. e. the assumption helps isolate the effects of a change in income on the quantity of steak purchased.