A firm is a price taker in the labor market if
A) the skills of available workers do not match the requirements for the job.
B) there is a scarcity of labor in the market.
C) the hiring of more workers will drive the existing wage rate up.
D) the hiring of more workers will leave the existing wage rate unchanged.
Answer: D
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Average variable cost is equal to
A) average total cost minus average fixed cost. B) average total cost multiplied by output. C) total cost divided by output. D) the change in total cost divided by the change in output.
According to Tobin's q theory, if q is ________, new plant and equipment capital is ________ relative to the market value of business firms, so companies can buy a lot of new investment goods with only a ________ issue of stock
A) high; dear; large B) high; cheap; large C) high; cheap; small D) low; cheap; large E) low; cheap; small
The investment function intersects the saving schedule at an interest rate of 8 percent and a level of investment of $1.2 trillion a year. If the consumption curve intersects the 45-degree reference line at $3 trillion, then
A) the C + I curve will intersect the 45-degree reference line at $1.2 trillion. B) the C + I curve will intersect the 45-degree line at $1.8 trillion. C) the equilibrium level of real GDP is $1.8 trillion. D) the equilibrium level of real GDP is $4.2 trillion.
The resource market comprises of households and firms where the firms sell their resources to the households
a. True b. False Indicate whether the statement is true or false