Assume labor is the only variable input and that an additional input of labor increases total output from 72 to 78 units. If the product sells for $6 per unit in a purely competitive market, the MRP of this additional worker is:
A. $6.
B. $12.
C. $36.
D. $72.
Answer: C
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The Lorenz curves in the above figure imply that
A) income is distributed more unequally than wealth. B) wealth is distributed more unequally than income. C) both wealth and income are distributed equally. D) both wealth and income are distributed at the same level of inequality.
Securitization is
A) the process of combining many different debt instruments like home mortgages into a pool of hundreds of thousands of individual contracts and then selling new financial instruments. B) the process of securing loans at the bank. C) the process of combining assets and debt into a pool of individual contracts and then selling new financial instruments. D) the process that FDIC uses to insure.
Advantages of specialization do not include:
A. increased ability to utilize the division of labor. B. less interdependence. C. increased production of economic goods with no increase in resources. D. the more efficient use of scarce resources.
The difference between the economic and political functions of government is that
A. the economic function is concerned with correcting for market failures while the political function is not. B. the economic function is concerned with the reallocation of income while the political function is not. C. the economic function is concerned with the Federal Taxation system while the political function is not. D. the economic function encourages merit goods while the political function discourages demerit goods.