Say a firm that sells its product at a price of $20 is using 20 units of labor. If the marginal product of the last unit of labor hired was 10, and the firm pays each worker a wage of $40, then this firm should
A. hire more workers.
B. keep the same number of workers.
C. decrease the number of workers.
D. decrease its output.
Answer: A
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Which of the following is most likely to happen to open-access wildlife resources?
a. They will be used efficiently. b. They will not be used at all. c. It will be unprofitable to use them. d. They will be used but will generate no profit. e. They will become extinct.
Overfishing and extinction of species arise because of:
a. an abundance of natural resources. b. communist countries. c. the lack of incentive to take care of these species. d. private ownership of these resources. e. a high degree of economic freedom in all countries.
The government implements fiscal policy when it changes
A) spending and/or interest rate. B) money supply and/or taxes. C) taxes and/or spending. D) taxes and/or interest rate.
Refer to the given market-for-money diagrams. If the interest rate was at 8 percent, people would:
A. sell bonds, which would cause bond prices to fall and the interest rate to fall.
B. buy bonds, which would cause bond prices to rise and the interest rate to fall.
C. have insufficient liquidity, which would cause them to reduce their spending on consumer
goods.
D. buy bonds, which would cause bond prices to fall and the interest rate to rise.