The monopsonist will employ labor to the point at which the
A) marginal factor cost equals the marginal revenue product of labor.
B) marginal revenue product equals the wage rate.
C) marginal cost of output equals the marginal revenue.
D) demand equals the supply of labor.
Answer: A
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A decision by Congress to reduce spending in order to balance the government's budget is an example of ________ policy.
A. structural B. aggregation C. fiscal D. monetary
When the Federal Reserve reduces its target rate of inflation, it will set a ________ real interest rate at every inflation rate and the aggregate demand curve will ________.
A. lower; shift to the right B. higher; shift to the left C. lower; shift to the left D. higher; shift to the right
In the mainstream view, one major source of instability in the macro economy is the volatility of
A. investment spending. B. product prices. C. consumer spending. D. labor wages.
Suppose the refrigerator repairman charges you for two hours of labor even though he could have fixed it in ten minutes. This is an example of
a. natural selection b. moral hazard c. hidden actions d. external costs e. hidden characteristics