Assume that this graph illustrates a perfectly competitive labor market.
Equilibrium in this labor market is at a wage of ________ per hour and an employment level of ________ person-hours per day.
A. $20; 125
B. $30; 150
C. $20; 200
D. $30; 100
Answer: B
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What the economist calls externalities create social problems
A) because opportunity costs are low when people live close to one another. B) only when the externalities are negative spillovers. C) partly because people have a limited ability to empathize. D) when people know about all the consequences of their behavior.
Total revenue falls as the price of a good decreases if the price elasticity of demand is
a. Elastic b. Inelastic c. Unitary elastic d. Perfectly inelastic
To answer the question, refer to the following figure, showing the marginal revenue product (MRP) and the average revenue product (ARP) curves of a perfectly competitive firm hiring a single variable input, labor.
If the wage is above ________, the firm will shut down and hire zero workers in the short run.
A. $30 B. $32 C. $34 D. $41
In the IS-LM-PC model, which of the following is assumed to be exogenous?
A) G B) C C) I D) Y