If prices were rising at 5% per year during a recession, which of the following responses from firms would help facilitate the economic recovery, protect worker morale, AND reduce the firm's real labor costs?
A. A nominal wage decrease of 1%
B. A nominal wage increase of 7%
C. A nominal wage increase of 3%
D. A nominal wage increase of 5%
Ans: C. A nominal wage increase of 3%
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Movie theaters usually set lower prices for children than for adults because
A) children can be served at lower costs. B) they expect to make up the loss on the sale of refreshments. C) they think the price elasticity of demand for movie tickets is quite elastic for children at the regular or adult price. D) they want to get young people into the habit of attending movies.
When 4 units of labor are employed, total product is 6 units; when 5 units of labor are employed, total product is 9 units of output. If the price of output is $5 per unit, what is the marginal revenue product of the 5th unit of labor?
A) $3 B) $5 C) $15 D) $45
Suppose Dean has $500 and there are two companies he could invest X dollars in: Dog Gone Salon, which has a payoff of 2X with 50% probability and $0 with 50% probability and Pretty Kitty Grooming, which has a payoff of 4X with 25% probability and $0 with 75% probability. Which of the following is true?
A. It doesn't matter how distributes his $500 between the two investments, the expected payoff and the standard deviation will always be the same. B. Even though the expected payoff is the same for both investments, investing in Dog Gone Salon involves less risk. C. Even though the expected payoff is the same for both investments, investing in Pretty Kitty Grooming involves less risk. D. Investing in Pretty Kitty Grooming offers a higher expected payoff.
Decisions to determine the government's budget are called:
A. fiscal policy. B. structural policy. C. trade policy. D. monetary policy.