The demand for labor is called a derived demand because it is derived from the
A. productivity of labor.
B. amount of labor available at different wages.
C. demand for firms' outputs.
D. supply of the firm's products.
C. demand for firms' outputs.
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If individual X has comparative advantage in painting and individual Y has comparative advantage in carpentry, then
A) individual X must use fewer hours to paint a fence than individual Y. B) individual Y will specialize in painting. C) there is a lower opportunity cost (expressed in units of carpentry) for individual X to paint than for individual Y to paint. D) specialization will not occur, since each does not have a clear absolute advantage.
Short-run decisions refer to the:
A. hourly, daily, or weekly decisions that firms have to make. B. immediate decisions that firms have to make that affect the production process, not level of output. C. immediate decisions that firms have to make that affect level of output, but not the production process. D. decisions a firm has to make immediately to prepare for either entering or exiting an industry.
If a firm increases its output and finds that its average total cost decreases as a result, this implies that
a. marginal cost exceeds average total cost. b. the cost of producing an additional unit of output is more than the average total cost. c. average fixed cost is increasing. d. average total cost exceeds marginal cost.
Which of the following was the result of the Federal Reserve’s purchase of mortgage-backed securities in 2009?
A. MBS interest rates declined, home mortgage rates declined, and the Fed turned a profit on these operations. B. MBS interest rates declined, home mortgage rates declined, but the Fed had a loss on these operations. C. MBS interest rates increased, home mortgage rates declined, and the Fed turned a profit on these operations. D. MBS interest rates increased, home mortgage rates increased, but the Fed had a loss on these operations.