To maximize profit, a competitive firm hires workers up to the point of intersection of the
a. marginal product curve and the wage line.
b. value of marginal product curve and the wage line.
c. value of marginal product curve and the marginal revenue curve.
d. total revenue curve and the wage line.
b
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For a given amount of nominal income, the real income will
A. rise as the price level rises. B. fall if the price level falls. C. fall if the price level rises. D. be unaffected if the price level falls.
A price ceiling does NOT lead to a deadweight loss if ________
A) the equilibrium market price lies below the price ceiling B) the equilibrium market price lies above the price ceiling C) the price elasticity of market demand is greater than 1 D) the price elasticity of market supply is greater than 1
In 1990, Britain joined the ERM. If the German Bundesbank increased interest rates, assuming Britain does not maintain its exchange rate peg:
A) the only option available to Britain would be to increase its interest rate. B) the British pound would depreciate. C) the British pound would appreciate. D) the British economy would slow down.
A machine produces no benefits now, but $200 in benefits at the end of a year. At the end of the year it falls apart into a heap of dust never to be used again. The present value of its income stream is approximately
A. $200 if the interest rate is 20%. B. $220 if the interest rate is 10%. C. $200 no matter what the interest rate is. D. $182 if the interest rate is 10%.