An individual wheat farmer produces wheat in a perfectly competitive market. A decrease in the market demand for wheat will cause the farmer's marginal revenue to ________ and his profit-maximizing level of output to ________.
A. increase; increase
B. increase; decrease
C. decrease; increase
D. decrease; decrease
Answer: D
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Indicate whether the statement is true or false
After getting a raise at work, Jennie now regularly buys steak instead of hamburger. Based on this behavior, we can assume:
A. steak is a normal good, and hamburger is an inferior good for Jennie. B. steak is an inferior good, and hamburger is a normal good for Jennie. C. steak and hamburger are complementary goods for Jennie. D. steak and hamburger are normal goods for Jennie.
Compensation of employees is the largest component of national income.
Answer the following statement true (T) or false (F)
Which of the following would NOT be used by firms to deter shirking?
A) requiring employees to post a bond B) offering a bonus after five years of service C) paying more than the market wage D) paying less than the market wage