The marginal revenue product of a resource depends on the following factors, except:
A. The price of the resource
B. The price of the product
C. The quantity of the resource employed
D. The marginal product of the resource
A. The price of the resource
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If 1 - b = WN/PY where W is the nominal wage rate, N is the quantity of labor input, and PY is total income in nominal terms, then labor's share of national income shrinks if
A) (w - p) > (y - n). B) (w - p) < (y - n). C) (w - n) > (y - p). D) (w - n) < (y - p).
If a firm or a nation desires to maximize its output, each productive assignment should be carried out by those persons who
a. have the highest opportunity cost. b. have a comparative advantage in the productive activity. c. can complete the productive activity most rapidly. d. least enjoy performing the productive activity.
When markets fail, public policy can
a. do nothing to improve the situation. b. potentially remedy the problem and increase economic efficiency. c. always remedy the problem and increase economic efficiency. d. in theory, remedy the problem, but in practice, public policy has proven to be ineffective.
Select the positive statement that completes the sentence: If wages rise more rapidly than productivity:
A. profits will fall. B. workers will earn 3/4 of GDP. C. the rate of inflation increases. D. policymakers should impose a wage ceiling.