An increase in the price of a firm's output increases the firm's demand for labor because the
A) marginal product of each worker increases.
B) value of marginal product of each worker increases.
C) value of marginal product curve becomes steeper.
D) value of marginal product curve becomes flatter.
B
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When a competitive equilibrium is achieved in a market
A) the total net benefit to society is maximized. B) the total benefits to consumers are equal to the total benefits to producers. C) economic surplus equals the deadweight loss. D) all individuals are better off than they would be if a price ceiling or price floor was imposed by government.
Voluntary agreements may not be a feasible method to internalize an externality when
A) the dollar value of the externality is large. B) the externality is negative rather than positive. C) there are significant transaction costs. D) there are high taxes on the firms that cause the externalities.
If a Starbucks tall latte costs $3.20 in the United States and 3 euros in the Euro area, then purchasing-power parity implies the nominal exchange rate is how many euros per dollar?
a. .938 If the exchange rate is less than this, it costs more dollars to buy a tall latte in the U.S. than in the Euro area. b. .938 If the exchange rate is less than this, it costs fewer dollars to buy a tall latte in the U.S. then in the Euro area. c. 1.067 If the exchange rate is less than this, it costs more dollars to buy a tall latte in the U.S. than in the Euro area. d. 1.067 If the exchange rate is less than this, it costs fewer dollars to buy a tall latte in the U.S. than in the Euro area.
An increase in energy costs will most likely cause the price level and rGDP to change in which of the following ways?
A) Increase/Increase B) Increase/Decrease C) Increase/No change D) Decrease/Increase E) Decrease/Decrease