Suppose the marginal product of labor equals 1/L. If the wage is $1 per unit of labor, what is the short-run effect on the firm's labor demand if the price of output were to double?
A) The firm will demand half as much labor.
B) The firm will demand twice as much labor.
C) The firm will demand the same quantity of labor.
D) There is not enough information to determine.
B
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Define the elasticity of supply and show how it is calculated
What will be an ideal response?
According to the kinked demand curve model, if an oligopolistic firm lowers its price, it should expect to see its total revenue:
A) increase. B) stay the same. C) decrease D) cannot be determined without more information.
Suppose the demand curve for a good is highly elastic and the supply curve is highly inelastic. If the government taxes this good,
a. buyers and sellers will each share 50 percent of the burden, regardless of the elasticities of the demand and supply curves. b. sellers will bear a larger share of the tax burden. c. the distribution of the burden will depend upon whether the buyers or the sellers are required to send the tax to the government. d. buyers will bear a larger share of the tax burden.
Using hypothetical numbers, calculate the real GDP for Country A and then calculate the real GDP per capita for this country.
What will be an ideal response?