After a firm makes short-run adjustments in its production plan following a wage increase,
A. the marginal product of labor will be higher.
B. the marginal product of labor will be lower.
C. the marginal product of capital will be higher.
D. the marginal product of capital will be lower.
E. (a) and (c)
F. (a) and (d)
G. (b) and (c)
H. (b) and (d)
Answer: A
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Which of the following best explains why the Social Security system will face financial difficulties in the future?
a. Too much Social Security revenue was invested in the private sector rather than in government bonds. b. In the next two decades, the number of workers paying into the system will decline sharply relative to the number of retirees collecting benefits. c. The federal government does not pay interest on the money it borrows from the Social Security system. d. The funds in the Social Security trust fund were invested in high-risk ventures that failed to pay off.
Welfare benefits reduce the need to work and result in a shift in the
A. Labor supply curve to the left. B. Labor demand curve to the left. C. Labor supply curve to the right. D. Labor demand curve to the right.
The original Phillips curve implied or assumed that
A) the markup over labor costs was zero. B) the expected rate of inflation would be zero. C) the actual and expected rates of inflation would always be equal. D) all of the above E) none of the above
For a perfectly competitive firm, any price below its minimum AVC is a
A) market price. B) shutdown price. C) profit maximizing price. D) negative price.