Suppose a firm is a price searcher in the product market and hires labor in a perfectly competitive labor market. If the wage rate is $20, the marginal product of the last worker hired is 5, and the firm is hiring the profit-maximizing amount of labor, then the marginal revenue product of the last worker hired must be
a. $1
b. $1.50
c. $4
d. $5
e. $20
E
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The "fair rules" view of fairness is based on
A) income transfers from the rich to the poor. B) property rights and voluntary exchange. C) utilitarianism. D) the big tradeoff. E) allocating resources using majority rule.
Which of the statements about the gains from international trade is CORRECT?
A) Everyone gains from international trade. B) Some people gain from international trade and some lose, though overall the gains exceed the losses. C) Some people gain from international trade and some lose; overall the gains exceed the losses. D) Everyone loses from international trade.
Without restrictions, the market supply curve is horizontal at P = 5, and the inverse demand curve for taxi cab rides is P = 20 - Q in a competitive market. Subsequently, only 10 taxi cabs are allowed in the market
This results in a deadweight loss of A) 0. B) 5.5. C) 12.5. D) 25.
If deficit spending does not contribute to public investment and crowds out private investment, then
A. Future productive capacity will be enhanced. B. The current generation will bear the total burden of the debt. C. The opportunity cost of the debt will be minimized. D. The rate of economic growth will decline, ceteris paribus.