The demand for ________ in a competitive industry depends on its productivity and upon how its product is valued in the marketplace.
A. only unskilled labor
B. only skilled labor
C. only labor in general
D. any factor of production
Answer: D
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Suppose a U.S. automotive manufacturer was considering moving to Mexico to take advantage of the lower wage rates for unskilled Mexican labor. The typical Mexican worker could produce 20 cars per day, while the firm's typical U.S. worker can produce 50 cars per day. If the firm currently pays its U.S. workers an hourly wage of $25, economic theory suggests that the firm should
a. move to Mexico if the Mexican hourly wage is less than $25. b. move to Mexico if the Mexican hourly wage is $15. c. move to Mexico if the Mexican hourly wage is $12. d. only move to Mexico if the Mexican hourly wage is less than $10.
Employers can try to overcome the moral-hazard problem involving their employees by
a. paying their employees more often. b. paying their employees below-equilibrium wages since the employees will likely shirk some of their responsibilities. c. better monitoring their employees' work efforts. d. requiring their employees to take a pre-employment work effort test.
One measure of “ability to pay” the national debt is the debt to
A. GDP ratio. B. tax ratio. C. spending ratio. D. investment ratio.
Under perfect competition, the firm's supply curve is their
A. the upward sloping portion of the marginal cost curve. B. marginal cost curve above the minimum of AVC. C. marginal cost curve above the minimum of ATC. D. the entire marginal cost curve.