Choose the letter of the curve in Figure 1.2 that best represents a production possibilities curve for two goods for which there are constant opportunity costs:
A. A.
B. B.
C. C.
D. D.
Answer: B
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The marginal revenue product of labor is defined as
A) the change in the firm's output as a result of hiring one more worker. B) the change in the firm's revenue as a result of selling one more unit of output. C) the change in the firm's profit as a result of hiring one more worker. D) the change in the firm's revenue as a result of hiring one more worker.
According to the graph shown, if the price were $15, a:
A. shortage would exist, signaling sellers to raise their price.
B. shortage would exist, signaling buyers to leave the market.
C. surplus would exist, signaling sellers to drop their price.
D. surplus would exist, signaling buyers to bid up the price.
AACSB: Analytical Thinking
Cooperation in repeated prisoner's dilemma situations seems to be enhanced by all of the following except
a. limited punishment schemes b. clarity of conditional rewards c. grim trigger strategy d. provocability--i.e., credible threats of punishment e. tit for tat strategy
Which of the following is true?
a. The best distribution of income can be determined objectively. b. The transfer of income from one group to another is costly; it will generally reduce total output. c. Positive economics can determine the variation in incomes that would be best for an economy. d. The fairness of an income distribution is determined by its pattern (the measured degree of income inequality). e. All of the above are true.