When the real wage is below the equilibrium price in the labor market ________
A) we have an excess supply of labor and the real wage should fall
B) we have an excess demand of labor and the real wage should fall
C) we have an excess demand of labor and the real wage should increase
D) we have an excess supply of labor and the real wage should increase
E) none of the above
C
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The marginal product of labor is the
A) change in total product produced by hiring an additional unit of labor. B) total revenue divided by units of labor. C) extra revenue gained by selling one more unit of output produced by hiring additional units of labor. D) extra revenue gained by employing one more unit of labor.
Suppose a competitive firm is paying a wage of $12 an hour and sells its product at $3 per unit. Assume that labor is the only input. If the last worker hired produces four units of output per hour, then to maximize profits the firm should
A) hire another worker. B) not change the number of workers it currently hires. C) lay off some workers. D) There is not enough information to answer the question.
Which of the following is true about inflation?
a. It reduces the cost-of-living of the typical worker. b. It is measured by changes in the cost of a typical market basket of goods between time periods. c. It causes the purchasing power of a dollar to rise. d. It has no effect on real resources.
Exceptionally favorable growing conditions in the vineyards of Napa Valley would cause a(n)
a. increase in the demand for wine, increasing price. b. increase in the supply of wine, decreasing price. c. decrease in the demand for wine, decreasing price. d. decrease in the supply of wine, increasing price.