When a profit-maximizing firm makes a decision to employ a worker, that decision is based on:
a. the individual contribution that the worker makes to the profit of the firm.
b. the average productivity of the firm's labor force
c. the familial relationship between the employer and the employee.
d. the total output produced by the firm.
a
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The marginal productivity theory of distribution holds that
A. each factor is paid what it deserves. B. the owner of each factor is paid the amount that the factor contributes to earnings. C. each factor’s income depends on how hard it works. D. each factor receives an equal share of the revenue from production.
A tax loophole is
a. an illegal method by which individuals or corporations avoid paying the taxes they legally owe. b. a provision in the tax code that allows individuals or corporations to reduce their tax burdens legally by meeting certain conditions. c. a tax surcharge on incomes within certain ranges. d. a provision in the tax code that allows individuals or corporations to shift the economic incidence of a particular tax on to someone else.
Because of the law of diminishing returns, as additional workers are hired, total output
A. Rises at a diminishing rate initially and eventually falls. B. Falls at a diminishing rate at all output levels. C. Rises at a constant rate at all output levels. D. Falls at an increasing rate at all output levels.
If an increase in consumer incomes causes the demand curve for product Q to shift to the right, then it can be said that product Q is a(n):
a. Inferior good b. Normal good c. Luxury good d. Inexpensive good