Which is true of a purely competitive firm in the long-run equilibrium?
A. Average fixed cost equals price
B. Marginal cost equals marginal product
C. Price equals marginal cost
D. Average variable cost equals marginal cost
C. Price equals marginal cost
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A decrease in labor costs will cause aggregate ________.
A. demand to decrease B. supply to decrease C. supply to increase D. demand to increase
Refer to Figure 8A.1. The stock of capital no longer increases once the economy reaches point
A) a. B) b. C) c. D) e.
Suppose a student is attending your college on an athletic scholarship, and doesn't pay a penny for tuition. According to the economic way of thinking, the student's cost of attending college is
A) zero. B) bore completely by the college's athletic fund. C) positive, because the student sacrificed some other opportunity to attend your college. D) positive, because the student still needs food and housing. E) negative, because nobody really gains by trying to combine athletics with higher education.
The wage of a known high-quality worker, wh, is $10,000. The wage for a known low-quality worker, wl, is $4,000. The share of the work force that is of high quality, s, is 0.5. For what value of the cost, c, of a college education that serves only as a signal of a high-quality worker does a pooling equilibrium exist?
A) c > $3,000 B) c < $3,000 C) c < $1,000 D) c = $2,500