If Tie-Dyed T-Shirts is currently employing labor so that the wage is greater than the marginal revenue product of labor, it must also be true that
A. the price of the product must be greater than marginal cost.
B. the price of the product must be less than marginal cost.
C. total revenues would be less than total costs.
D. the wage is less than marginal cost.
Answer: B
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In the above figure, if output is 10 units, then the total deadweight loss is
A) $5. B) $10. C) $20. D) $60.
In a country with floating exchange rates and low capital mobility, an increase in government spending will be
A) highly effective. B) less effective than with high capital mobility. C) not effective at all. D) harmful to the growth of real incomes.
According to the monetarists, the ratio of nominal GDP to the money stock should be
a. highly unstable in short run and in long run. b. unstable only during recession. c. unstable only in the long run. d. quite stable in the short run and the long run. e. unstable only if the LM curve shifts.
Capital rationing refers to
A) setting a minimum acceptable rate of return for a capital outlay. B) selecting among profitable capital outlays when there are constraints on the funds available. C) determining the maximum price to pay for a capital product. D) None of the above