Suppose that a hurricane destroys part of the tobacco crop in North Carolina
What willhappen to the price of tobacco? What will happen to the marginal product of tobacco field workers as a result of the hurricane? Can we tell what will happen to the demand for tobacco field workers? Explain.
As a result of the hurricane, the supply of tobacco will fall and the price of tobacco will rise. Because there is less tobacco to work in the fields, the marginal product of tobacco field workers will fall. This means that we are unable to tell what will happen to the demand for tobacco field workers. The increase in the price of tobacco raises the marginal revenue product of the field workers, while the drop in marginal product lowers the workers' marginal revenue product. The end result on the demand for labor will depend on which change is larger.
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The table above shows Mary's utility from chips and soda. Mary buys only chips and soda. Chips cost $2 per bag and soda costs $4 per six-pack. She has $20 to spend per week. To maximize her utility, Mary will buy
A) 5 sodas and 5 bags of chips. B) 3 sodas and 3 bags of chips. C) 8 sodas and 8 bags of chips. D) 6 sodas and 2 bags of chips.
Public policies designed to increase labor productivity do not include
a. subsidies for higher education. b. tax breaks for job retraining. c. tax breaks on corporate dividends. d. public education.
Number 11. According to the figure, expansionary monetary policy will cause an economy that is initially at full-employment output to go from equilibrium ______ to equilibrium ______ in the short run.
a. A; C b. A; B c. A; D d. C; B
A firm has reached its shutdown point when price is equal to minimum average total cost
Indicate whether the statement is true or false