When an economy operates efficiently,
a. the MRPs of every input into the production of a good are equal.
b. marginal utility equals marginal cost for every good.
c. the price of a good equals the sum of the marginal physical products of its inputs.
d. All of the above are correct.
b
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What happens when the Fed sells government bonds?
A) The money supply tends to rise. B) The money supply tends to remain unchanged. C) The money supply tends to fall. D) The U.S. budget deficit necessarily rises.
The federal minimum wage in 2010 was $7.25. If this wage rate was less than the equilibrium wage, what is the effect?
A) The minimum wage does not create unemployment. B) The number of people who want to work at the minimum wage is the same as the number of available jobs. C) The number of people who want to work at the minimum wage is greater than the number of available jobs. D) Deadweight loss exists.
If labor costs rise at the same time that the federal government decreases its purchases, in the short run
A) aggregate output and the price level will both increase. B) aggregate output will increase, but the price level will fall. C) aggregate output and the price level will both fall. D) aggregate output will fall, but the price level may either increase or decrease.
Oligopoly firms are guaranteed economic profits in the long run
a. True b. False Indicate whether the statement is true or false