Answer the following questions true (T) or false (F)
1. If marginal product is equal to average product, then total product is at a maximum.
2. If marginal cost is above the average variable cost, then average variable cost is decreasing.
3. If the marginal product of labor is decreasing, then marginal cost of production must be rising.
1. FALSE
2. FALSE
3. TRUE
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How is the interest rate that prevails in the bond market determined?
A) by the interaction of stock prices and bond prices B) by the decision of the president, in consultation with Congress C) by the demand for and supply of bonds D) by the Board of Governors of the New York Stock Exchange
Why do investors hedge using futures contracts?
A) they are seeking to increase liquidity B) they are willing to pay for a reduction in risk C) in order to provide a counterparty to speculators D) they are more flexible than forward contracts
An industry's equilibrium wage rate is established
A) by the industry supply curve for labor alone. B) by the slope of the industry demand curve for labor alone. C) by the Labor Department and based on the cost of living in the area. D) by the intersection of the industry supply and demand curves for labor.
If the consumer price index (CPI) this year is 162 and last year it was 170, the inflation rate a. is positive
b. is negative. c. has decreased since last year. d. has increased since last year. e. is the same as last year.