To answer, refer to the following:"At Huffy's ... bicycle factory, 1,700 employees turn out 15,000 bicycles a day (in 1987). Five years before, it required 2,200 workers to make 10,000 bikes daily." (The Wall Street Journal). In 1987,
A. total product was 15,000 bicycles per day.
B. the average product of labor was 0.11.
C. the marginal product of labor was 8.8.
D. both a and b
E. both a and c
Answer: D
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Last year, Casey grew fresh vegetables, which she sold at her local farmers market, but this year, Casey did not plant any vegetables and went to work at a bank instead. Which of the following best explains Casey's career change?
A. Casey's opportunity costs of gardening exceeded Casey's opportunity costs of working at the bank. B. Casey's opportunity costs of working at the bank exceeded Casey's benefits from gardening. C. Casey's opportunity costs of gardening exceeded Casey's benefits from working at the bank. D. Casey's opportunity costs of working at the bank exceeded Casey's opportunity costs of gardening.
What is regulatory capture?
A) It is a situation in which a firm being regulated successfully influences the regulatory agency's actions to benefit the interests of the firm, rather than the public interest. B) It is a situation in which a regulatory agency uses its authority to force actions that are not favored by the regulated firms but are in the public's interest. C) It is a situation in which a policymaker seeks to improve his election prospects by aligning himself with a powerful special interest group which will finance his political campaign. D) It is the exchange of political support between a regulatory agency and the regulated firm resulting in both parties capturing economic rents.
An increase in the real interest rate
A) increases savings for both borrowers and lenders. B) increases savings for borrowers, but has an uncertain effect on the savings of lenders. C) increases savings for lenders, but has an uncertain effect on the savings of borrowers. D) has an uncertain effect on the savings of both borrowers and lenders.
Adverse selection in insurance requires that
a. all people face the same risk b. potential customers facing more risk are no more interested in purchasing insurance c. people are risk averse d. insurers can tell higher risk people from lower risk people