If the MPP of a worker is 12 units per hour and the wage rate is $10 per hour, the unit labor cost is equal to $1.20 per unit of output.
Answer the following statement true (T) or false (F)
False
The wage rate divided by the marginal physical product is equal to the unit labor cost. When the wage rate is $10 per hour and the MPP is 12 units per hour, the unit labor cost is $0.83= (10/12).
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The figure above shows the market for private elementary school education in Chicago. There is no external cost of private elementary education. If the government does not intervene in this market, the deadweight loss equals
A) 0. B) $800,000. C) $1,600,000. D) more than $1,600,000. E) more than $800,000 and less than $1,600,000.
Which of the following would not be a Pareto superior move?
a. A market exchange. b. A group that unanimously decides to undertake an activity. c. A group that decides by majority rule to undertake an activity. d. A contingent contract for a group to undertake an activity at some time in the future.
According to the Phillips curve analysis, if policy makers reduce aggregate demand growth, they can lower inflation, but only at the cost of a: a. permanent increase in the natural rate of unemployment. b. permanent increase in the actual unemployment rate
c. temporary increase in unemployment. d. temporary decrease in the natural level of unemployment.
Nicole's income is $1,000 per month. She spends all of it on shoes (S) and books (B). Shoes cost $50 and books cost $25. Her marginal rate of substitution for shoes with books is MRSSB = 2B/3S. Illustrate her utility-maximizing combination of shoes and books and draw her price-consumption curve if the price of books rises to $30.
What will be an ideal response?