A manager of a small company makes the following statement – "We need to keep hiring additional workers up to the point where the marginal productivity of the last worker we hire is at its maximum
This way we can maximize the total productivity of the firm." Critically evaluate this statement.
This statement is false. The total product will be maximized when marginal productivity is zero. Even if the firm continues to hire workers long after the one with the maximum marginal productivity the firm will still see an increase in overall productivity if the additional workers still have a positive marginal productivity.
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The Federal Reserve increases the interest rate at which it lends to other banks. The resulting economic change will be represented by a(n): a. upward movement along the short-run Phillips curve. b. downward movement along the short-run Phillips curve. c. rightward shift of the short-run Phillips curve
d. leftward shift of the short-run Phillips curve.
If the Fed decides to maintain a fixed euro/dollar exchange rate when they sell euros:
A. there will be pressure on domestic interest rates to increase. B. the domestic money supply will increase. C. they will have to impose capital controls. D. this will increase banking system reserves.
Why are government welfare programs often called entitlement programs?
A. Because every U.S. citizen, regardless of income, is entitled to receive benefits under these programs. B. Because everyone living in the U.S., whether the person is a citizen or not, is entitled to a minimum level of income. C. Because those who fail a means test are eligible for cash assistance but not in-kind transfers. D. Because people whose income is below a certain level are entitled to government assistance.
In communities where more people carry property insurance you would expect people to be:
A. less careful about securing their possessions. B. more careful about securing their possessions. C. less likely to engage in behaviors that would be classified as moral hazard. D. paying less for property insurance relative to communities where fewer people carry property insurance.