BigBiz, a local monopsonist, currently hires 50 workers and pays them $6 per hour. To attract an additional worker to its labor force, BigBiz would have to raise the wage rate to $6.25 per hour. What is BigBiz's marginal factor cost?
A. $6.25 per hour.
B. $12.50 per hour.
C. $18.75 per hour.
D. $20 per hour.
Answer: C
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If an economy is operating at a point inside the production possibilities curve,
What will be an ideal response?
Between 1968 and 2008 the percentage share of income that went to the top quintile
A. fell substantially. B. fell somewhat. C. stayed about the same. D. rose substantially.
A producer is hiring 20 units of labor and 6 units of capital (bundle A). The price of labor is $10, the price of capital is $2, and at A, the marginal products of labor and capital are both equal to 20. Beginning at A, if the producer increases expenditures on labor by $1 and decreases expenditures on capital by $1, then
A. output remains constant and cost increases by $8. B. cost remains constant and output decreases by 8 units. C. cost remains constant and output increases by 12 units. D. cost remains constant and output increases by 20 units. E. output remains constant and cost decreases by $2.
Which of these is most likely to shift the long-run aggregate supply curve to the left?
What will be an ideal response?