In the marginal productivity theory of income distribution, when all markets are purely competitive, the payment for each unit of a resource is equal to its:
A. Total product
B. Marginal product
C. Marginal revenue product
D. Total revenue product
C. Marginal revenue product
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When one individual writes a check to another individual the money supply will not be changed
Indicate whether the statement is true or false
Assume x and y are the only two goods a person consumes. If after a rise in pX the quantity demanded of y increases, one could say:
a. the income effect dominates the substitution effect. b. the substitution effect dominates the income effect. c. it is still impossible to determine whether the substitution or income effect dominates. d. none of the answers is correct.
If you were building a macroeconomic model that explores the effect of an increase in income tax rates on the size of the labor force, the exogenous variable(s) would be
A) income tax rates. B) the size of the labor force. C) both income tax rates and the size of the labor force. D) neither income tax rates nor the size of the labor force.
The equation of exchange states that: a. government spending = taxes plus the federal budget deficit
b. the reciprocal of the reserve requirement = the deposit expansion multiplier. c. the money supply times the velocity of money = the price level times the quantity of goods and services produced. d. the price level times the velocity of money = the money supply times the quantity of goods and services produced.