The value of marginal product (VMP) of an input such as labor is the
A) additional output produced by the last unit of an input.
B) total revenue divided by the units of the input employed.
C) extra revenue gained by selling one more unit of output.
D) extra revenue gained by employing one more unit of the input.
D
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The longer is the interval between firms' price adjustments
A) the smaller the output effect of a given change in the money supply. B) the longer the interval that the horizontal new Keynesian aggregate supply curve will remain in position. C) the new Keynesian aggregate supply curve will become steeper. D) the shorter the interval the horizontal new Keynesian aggregate supply curve will remain in position.
Andrew's utility of wealth schedule is depicted in the above table. Andrew is offered a job as a cook which pays $10,000. He is also offered a job as a server which will pay $5,000 if tips are poor and $15,000 if tips are good
There is a 50 percent chance that tips will be poor and a 50 percent chance that tips will be good. Given the nature of Andrew's job offers and his utility of wealth schedule, Andrew will A) accept the offer to work as a server. B) accept the offer to work as a cook. C) be indifferent between working as a cook or a server. D) be unable to reach a decision about which offer to accept.
The property of diminishing marginal rate of substitution follows from the property that the indifference curves are
A) downward sloping. B) upward sloping. C) bowed in toward the origin. D) bowed out from the origin.
Which of the following provides the clearest statement of the Ricardian equivalence theorem?
a. Both an increase in government expenditures and a reduction in taxes will provide a substantial stimulus for aggregate demand. b. When additional debt is used to finance a tax cut, the lower taxes and higher interest rates will exert an equivalent impact on aggregate demand. c. The finance of government spending with additional debt is essentially the same thing as finance with higher taxes because the larger debt implies higher taxes in the future. d. A 10 percent reduction in tax rates will reduce tax revenues by 10 percent.