Other things held constant, after some point hiring additional units of labor will cause the marginal physical product of labor to decline because
A. the wage rate increases when additional workers are hired.
B. of the law of diminishing marginal product.
C. the firm is a price taker.
D. the supply of labor is perfectly elastic.
Answer: B
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Currently tire producers must receive a price of $50 per tire to produce 5000 tires. If the supply curve of tires is upward sloping, then to produce one additional tire, tire producers will need to receive a price of
A) $50. B) less than $50. C) more than $50. D) $0.
The currency crisis of 1992 caused France and a number of other countries to choose between
A) a single currency for the EU and keeping their own currency. B) doing the right thing for their domestic economy and defending the exchange rate. C) lowering interest rates and reducing unemployment. D) competitive devaluations and falling unemployment. E) the Maastricht Treaty and the Single European Act.
The poverty rate of the elderly in the United States has
a. been constant since 1959 b. risen since 1959 because people are living longer c. fallen since 1959 because of the growth in Social Security and Medicare programs d. fallen since 1959 because of the growth in private retirement plans e. fallen since 1959, mainly because of inflation
The money multiplier process is based on the principle of fractional reserve banking
a. True b. False Indicate whether the statement is true or false