A perfectly competitive firm should hire additional units of labor in a competitive labor market if
a. marginal revenue is less than marginal cost
b. the marginal revenue product exceeds the wage rate
c. total revenue exceeds total cost
d. the marginal product of labor exceeds the wage rate
e. the marginal product of labor is less than the wage rate
B
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The demand curve for canned peas is downward sloping. If the price of canned peas, an inferior good, rises, then
A) the income effect which causes you to reduce your canned peas purchases is smaller than the substitution effect which causes you to increase your purchases, resulting in a net increase in quantity demanded. B) the income and substitution effects offset each other but the price effect of an inferior good leads you to buy more canned peas. C) both the income and substitution effects reinforce each other to decrease the quantity demanded. D) the income effect which causes you to increase your canned peas purchases is smaller than the substitution effect which causes you to reduce your purchases, resulting in a net decrease in quantity demanded.
The measure of production that values production using current prices is called
A) nominal GDP. B) value-added GDP. C) real GDP. D) underground GDP.
If policy makers desire a $30 increase in output and the consumption function is C = 100 + .75(Y-T), then they must
a. increase government spending by $8. b. increase taxes by $10. c. cut government spending and taxes by $10. d. decrease taxes by $10.
Pollution permit policies achieve an ________ outcome because ________.
A. efficient; firms that have the highest cost of reducing pollution will have the greatest incentive to purchase permits. B. inefficient; the supply of permits is set by the government, and so is perfectly inelastic. C. inefficient; wealthier firms can afford to purchase more permits. D. efficient; firms that have the lowest cost of reducing pollution will be able to pay more for each permit.