Refer to the above table. Suppose the marginal revenue product of the 5th worker is $800. This implies that
A. the price of the good is $5.33.
B. the price of the good is $8.
C. the price of the good is $70.
D. we cannot tell what the price of the good is without more information.
Answer: B
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Suppose that an economy's labor became more productive between year 1 and year 2. We could conclude that this economy's
A. real GDP remained constant. B. production possibilities frontier shifted outward. C. production possibilities frontier shifted inward. D. capital stock increased by 3%.
When a proposed merger between two companies is reviewed by the government, the relevant market is defined by
A) how elastic the demand is for each firm's product. B) how much advertising is done in the industry. C) whether or not there are close substitutes for the products of the two firms. D) counting the number of firms that produce the same product.
When studying individuals' economic behavior, economists assume that
A) individuals understand the rationale for all their actions. B) individuals act as if they were rational. C) only educated people act as if they were rational. D) self-interest is of limited relevance in predicting an individual's actions.
The demand curve for a good that has many perfect substitutes in consumption is likely to be
a. upward sloping b. steep c. highly inelastic d. horizontal e. vertical