Suppose the marginal product of labor is MPN = 200 - 0.5N
where N is aggregate employment. The aggregate quantity of labor supplied is 100 + 4w, where w is the real wage. The government imposes a minimum wage of 60. What is the quantity of employment?
A) 240
B) 260
C) 280
D) 300
C
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Equilibrium market prices for capital and labor are $10 and $8, respectively. Then, the economy experiences one or more supply shocks, so that the marginal product of capital is $9, and the marginal product of labor is $6
Assuming that the available quantities of capital and labor are fixed, which of the following is (are) likely to decrease as the economy approaches its new equilibrium? A) economic profits B) real rental price of capital C) total output D) the quantity of capital in use E) none of the above
The demand for a luxury good whose purchase would exhaust a big portion of one's income is:
A. perfectly price inelastic. B. perfectly price elastic. C. relatively price inelastic. D. relatively price elastic.
When there is an external benefit, the unregulated market
A. overproduces the good or service. B. reaches the most efficient solution. C. maximizes public welfare. D. underproduces the good or service.
The marginal revenue curve for a perfectly competitive firm
A) is downward-sloping. B) is the same as its demand curve. C) is perfectly inelastic. D) is the same as its marginal cost curve.